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

[JMD]

On 20/05/2022 at 18:30, Castlevania said:

The easy money has been made. Buy insolvency practitioners when the economy is booming; sell when it’s not. They’re back at around the level I sold the last of my holding at the start of last year. 

All that talk of business cycles is triggering me...  I'll have you know that Gordon Brown stood at the despatch box and told parliament that he'd solved the economic boom-bust cycle. That was back in the early naughties - in fact not long after he'd sold all our gold - and before the decade had ended, he would go on to save the banking system (at the time he actually thought he'd saved the whole world, but his Presbyterian humbleness prevented him from stating this aloud in public).

[JMD]

On 20/05/2022 at 19:01, stoobs said:

This always puzzles me, how do a tiny minority who own nearly everything control an enormous majority?

In modern UK this comes down to the Tories (and likely other parties) performing some astonishing mind-control trick where they manage to convince the Peasants that they too will become Lords given enough time. Therefore don't rock the boat by forcibly taking ownership of the biggest land estate in your locality.

Yes, the mind control trick was to initially bribe sufficient numbers of the population with so called "trickle down' (a term popularised in the 80s but been going on for centuries) economics, and in more recent times with trickle down democracy. However the 'real economy' and 'real democracy' are hidden from and therefore denied to the majority, but that's another topic entirely.

[JMD]

On 20/05/2022 at 19:47, ThoughtCriminal said:

I think most of us are Gen X, give or take, so I'd say what we're going to see as we enter the path to our twilight years is the inversion of the 80s/90s: that meteoric rise in living standards and new tech etc will be mirrored by the decline and reversion to the mean.

 

I think life without cheap energy will look something like the 50s. Minus the homogeneous, high trust society society.

 

I don't know if anyone is familiar with Peter Thiel, but his big thing has always been that we've been stagnating for a long time now. He points out that air travel is now slower (demise of Concorde), the record for the fastest transatlantic crossing was set in 1952, not been back to the moon in more than 50 years. 

 

The end of cheap energy probably seals the deal.

Peter Thiel is an interesting character, founder of PayPal, etc. I feel he speaks in code a lot of the time so not to scare the public! But yes he believes the last 50 years have been squandered and we now operate under a completely dislocated economy and totally disfunctional political system. In terms of dislocation/disfunction and squandered time frames - in particular regard to rising world population and its social expectations - i think he has said that until we get fusion energy working, the world is under great existential risk of breakdown and chaos.

[JMD]

8 hours ago, leonardratso said:

nearly;

https://www.itv.com/news/anglia/2022-03-01/not-so-simples-russian-meerkats-aleksandr-and-sergei-pulled-from-news-ads

Not quite the toys themselves, but the ad campaign i suppose, maybe they'll make a comeback with ukranian accents, is there much difference?

Difference in Slavic accents? The media seemed curiously well primed to pronounce Kiev(Russian) as Keeeee'eev(Ukrainian) from the get go. Not making light of the war there, but it still irritates me because it is I think an example of the media political gesturing and worse that we have been subjected to from the beginning of the conflict.

[JMD]

On 20/05/2022 at 12:34, Noallegiance said:

The title is about gold, but there's loads more great stuff in here:

 

Ok listened only to the first few minutes so far, but is 'London Paul' actually Paul Joseph-Watson, the right wing youtuber and blogger? If so don't get me wrong as that's not necessarily a problem, however it would mean he's appearing under false pretences as I'm sure Joseph-Watson was never a physicist or a metals trader!... Anyway, just saying, and maybe listen to it before it gets taken down?

[WICAO]

9 hours ago, Plan-b said:

So I've reviewed my poxy Nest company pension choices, I'm very fickle so guess what I went with?

Theres 5 choices so vote accordingly  

You only have 5 investment choices and not one that buys the market?

[CVG]

9 hours ago, leonardratso said:

err, sharia?

Mmm. It's terrible really. Although amusing, be wary of the Sharia fund. It only invests in around 90 companies rather than 2000 odd. Look here:

https://transparency.platform.tumelo.com/nest/30123f5a-acfd-47d7-91ed-4e8b1e54e4d9

 

[Transistor Man]

10 hours ago, DurhamBorn said:

This ^ .Its very likely thats why.I dont see many trees going up on all the grouse moors.I think the whole thing is about getting the plebs to consume less oil and gas so it lasts longer for the rich.They also know they need 40 to 50 years for renewables.If they want to save the planet they could start by planting trees etc into all these huge areas of council owned grass,yet very little happens.

I’ve come to think similar.

There must be a desire to limIt the lives of ordinary people too. 

They could have gone with a little coal + scrubbers + burying fast growing trees, underground, or just under soil. That could trap a lot of carbon for thousands of years.

But those ideas are of zero interest. 

[THE SOUP DRAGON]

46 minutes ago, WICAO said:

You only have 5 investment choices and not one that buys the market?

It's a  NEST,  a government backed scheme for small employers to ensure everyone has an additional pension to their state pension. I never hear anything positive from them. Famously known hear for dumping BP at a very low price.

Fund choices | Nest Pensions

[Lightscribe]

They could of put heavy restrictions on corporate mega ship dredging of ocean floors (which contains around 38000 gigatones of carbon and 16 times as much as the terrestrial biosphere) at the same time as wiping out a few levels of bio diversity and the food chain in one fell swoop.

They could have put heavy restrictions on China which accounts for 28% of the worlds carbon output and won’t even peak to 2027. Although good job Australia have voted to now fuck themselves over even though they are 16th on the list of carbon footprint producing 1% of the worlds of global output.

They could have put heavy restrictions on the deforestation in South America which loses 2.6 million hectares of forest per year.

The reason why they don’t do all these things because it’s all a load of bollocks. The fiat system went from gold/silver to the petrodollar. They were always going to rinse every last bit of profit out of oil until there wasn’t going to viable reserves on a global scale anymore.

Now comes the hard landing. Pre-conditioning to consume less, use less energy, pay more for it. Climate change is the reason given, necessity to maintain structural order with far less is the basis behind it.

The population ‘problem’ has already been solved within one generation of the young not being able to afford a house or kids (Or indeed the media indoctrination to even have the inclination to do so). That’s why there’s no ‘normal’ coming back.

Question is what happens when/if the frogs realise the water is getting warm.

https://www.bitchute.com/video/xqMGDM7Khncc/

 

[King Penda]

47 minutes ago, THE SOUP DRAGON said:

It's a  NEST,  a government backed scheme for small employers to ensure everyone has an additional pension to their state pension. I never hear anything positive from them. Famously known hear for dumping BP at a very low price.

Fund choices | Nest Pensions

Whose funds will be robbed by a government in the future 

[working woman]

Re what is the real agenda.  The powers that be have known for years that we would run out of oil and gas someday, how could they not know. I've been aware of it for the last 20 years at least.  I often have discussions with my husband about it, how they must have a plan to deal with it, and he says no, humans are hopeless and just deals with crises as they crop up. You just need to watch some drivers on the motorways who seem to only look 1m ahead.   I guess we are going to find out which one of us is right. Maybe a mixture of both.

Re Watch what the wealthy do etc.................

With an interest in fashion, I like to see what the Duchess of Cambridge is wearing, as she is one of the most influential women in the country.  At the recent premier for a Tom Cruise film, she wore a lovely Roland Mouret dress. Now, I would have thought by now she would have been exploring all the "Sustainable Fashion" fashion brands, given how Princes Charles and William are so concerned about environmental issues.  An interest in SF is pretty mainsteam now for younger generations.  She has worn the most beautiful dresses in the past and could easily wear them again, or cut them up to make something "new", but no.  It was a pretty plain and minimal style, so maybe that his her thinking of what SF is.

Meanwhile, on the news this morning, a feature on saris made in India, made in the traditional low energy way, hand operated cotton looms and weaving looms.  The resulting fabric was very fine and beautiful. I think I have seen a glimpse of the future.

[Animal Spirits]

20 hours ago, Errol said:

 

How will they approach the sale of MBS, if at all? They'll end up holding them to maturity (which is years) unless they sell at a sizeable loss. Where's the bid for a 2% MBS given the spread that now exists between these and newly issued MBS?

If the Fed makes a loss it also means remittance payments to the Treasury stop.

[Axeman123]

2 hours ago, CVG said:

Mmm. It's terrible really. Although amusing, be wary of the Sharia fund. It only invests in around 90 companies rather than 2000 odd. Look here:

https://transparency.platform.tumelo.com/nest/30123f5a-acfd-47d7-91ed-4e8b1e54e4d9

 

How is buying Alphabet and Amazon etc "sharia"? Obviously I don't see any Diageo (grog),but then I do see Mastercard and Visa (Usury). Is sharia just a scam like ESG?

90 companies is way too concentrated, but it is nice to see miners and oil.

[DurhamBorn]

2 hours ago, Transistor Man said:

I’ve come to think similar.

There must be a desire to limIt the lives of ordinary people too. 

They could have gone with a little coal + scrubbers + burying fast growing trees, underground, or just under soil. That could trap a lot of carbon for thousands of years.

But those ideas are of zero interest. 

Exactly.Look at the moors,devoid of trees so a few rich can shoot grouse (and anything that moves).Its also a great way for the rich land owners to extract rent from turbines,solar etc.Seems they want people to lose their cars etc,multi generational living in houses etc.I think those things are coming.Its all about consuming less for ordinary people.Of course putting bennies up at the same time will ensure systemic collapse.

[King Penda]

11 minutes ago, DurhamBorn said:

Exactly.Look at the moors,devoid of trees so a few rich can shoot grouse (and anything that moves).Its also a great way for the rich land owners to extract rent from turbines,solar etc.Seems they want people to lose their cars etc,multi generational living in houses etc.I think those things are coming.Its all about consuming less for ordinary people.Of course putting bennies up at the same time will ensure systemic collapse.

Bennies will go up the question will be will I be Geting any of them before I’m back at work

[Napoleon Dynamite]

2 hours ago, CVG said:

Mmm. It's terrible really. Although amusing, be wary of the Sharia fund. It only invests in around 90 companies rather than 2000 odd. Look here:

https://transparency.platform.tumelo.com/nest/30123f5a-acfd-47d7-91ed-4e8b1e54e4d9

 

Yep very tech heavy.

Looks like it's performed well, but I bet those figures are now out of date and are no longer look so good.

 

[Yadda yadda yadda]

10 minutes ago, King Penda said:

Bennies will go up the question will be will I be Geting any of them before I’m back at work

Bennies have to go up at a lower rate than inflation or else employment collapses. The only people left working average wage jobs will be those with mortgages - how many of us are there? Most of the young rent whilst a lot of 50 and 60 somethings own outright. At some point inflation would go stratospheric as even less is produced. The pound would collapse or some other trigger would bring everything down.

[King Penda]

1 minute ago, Yadda yadda yadda said:

Bennies have to go up at a lower rate than inflation or else employment collapses. The only people left working average wage jobs will be those with mortgages - how many of us are there? Most of the young rent whilst a lot of 50 and 60 somethings own outright. At some point inflation would go stratospheric as even less is produced. The pound would collapse or some other trigger would bring everything down.

It’s a perfect opitunity to start with food stamps ie a top up which can be withdrawn has inflation fluctuates

[BurntBread]

I am guessing the macro models describe how the different sectors respond to the price and quantity of money: when there is a big injection of new money, it flows first into certain sectors, and then, with a delay, into other sectors of the economy. Classical economics then says that production expands in those sectors that money flows to (again with a lag), and so the profitability is handed across to the next sectors in the chain.

I guess what we need to contemplate is what happens when one of the factors of production (in this case energy) turns out to be unexpectedly inelastic: that increased profits do not call forth new supply (or only with a very long lag, of a decade or more).

I am wondering if there is an analogy from the middle ages, when another basic factor of production, at the basis of the supply chain, was completely inelastic: namely land? In that case, land ended up completely owned by the oligarch/aristocrat class, and was the foundation for their power. Could we rapidly move toward a world where ownership of oil companies becomes the exclusive province of the elite?

That would explain why governments didn't simply tell us, "look, cheap oil is running out, and we're going to have to cope with the consequences"; but instead created a (partially true) narrative of climate change and environmental degradation. That let them make the case that oil and gas was actually doomed, and "stranded assets". If they had told us the truth, there would have been a rush from ordinary people to own the oil companies instead.

Is there a possibility that even the super-majors might be taken private? Remember there was a point in time when Exxon (if I remember correctly) was valued at less than Tesla.

[sleepwello'nights]

14 hours ago, Spiney Norman said:

The above is true.

Amongst my collegues there is a level of both ignorance and apathy that is truly shocking, and they are proffesional engineers. God only knows how bad the general public are.

It's also because the financial services industry obfuscates and perpetuates the myth of complexity. Pensions are made to seem very complicated. The very fact there are so many investment strategies is testament to that. Indeed much more publicity is given to the investment stars that fall, it serves to keep the fear factor alive.

Another factor is that the best time to start nvesting is when you are young. However when you are young the time when you need pension income is a loooong , looong way off and there are other more pressing needs on your income. 

 

[sleepwello'nights]

14 hours ago, Cattle Prod said:

I've often thought this, makes a lot of sense.

As someone with expert knowledge of the oil industry what is your opinion on snippets that I am reading more frequently that oil is a mineral resource that is continually being replenished naturally. 

Here's a link to one such opinion: https://rense.com/politics6/replent.htm

[DurhamBorn]

16 minutes ago, Yadda yadda yadda said:

Bennies have to go up at a lower rate than inflation or else employment collapses. The only people left working average wage jobs will be those with mortgages - how many of us are there? Most of the young rent whilst a lot of 50 and 60 somethings own outright. At some point inflation would go stratospheric as even less is produced. The pound would collapse or some other trigger would bring everything down.

I think its the key moment of the cycle here in the UK.If the government put bennies up with inflation from September then the roadmap moves to even higher inflation and much higher risk of systemic collapse.However i see nothing yet to think they wont,no pushback,not one mention of the fact high bennies are one of the main problems.The left own the narrative at the moment due to the media etc.Employment wont collapse,but the margins will move and continue in one direction.Since Blair they had mass migration and monetising debt to mask it,now they dont.It could be the government is demonizing the BOE so that printing isnt available.My friends daughter and her boyfriend have 6 kids between them,he has just got a 4 bed house,she a 3,between them they get £3900 a month in bennies.She sublets her house of course and lives with him.My friend hates what she is doing,but like he says Browns bennies have corrupted them all.Funny enough he has retired at 52 and gone on sickness bennies,sick of working to pay bennies,even though his daughter takes a massive amount.

[Shamone]

9 minutes ago, DurhamBorn said:

I think its the key moment of the cycle here in the UK.If the government put bennies up with inflation from September then the roadmap moves to even higher inflation and much higher risk of systemic collapse.However i see nothing yet to think they wont,no pushback,not one mention of the fact high bennies are one of the main problems.The left own the narrative at the moment due to the media etc.Employment wont collapse,but the margins will move and continue in one direction.Since Blair they had mass migration and monetising debt to mask it,now they dont.It could be the government is demonizing the BOE so that printing isnt available.My friends daughter and her boyfriend have 6 kids between them,he has just got a 4 bed house,she a 3,between them they get £3900 a month in bennies.She sublets her house of course and lives with him.My friend hates what she is doing,but like he says Browns bennies have corrupted them all.Funny enough he has retired at 52 and gone on sickness bennies,sick of working to pay bennies,even though his daughter takes a massive amount.

Absolute state of this cuntry. 

[RJT1979]

14 hours ago, Castlevania said:

This is my view. I have no idea whether increased levels of carbon dioxide in the atmosphere is a bad thing (I’d expect plants to thrive from higher levels) but we realistically do need to reduce the use of oil and gas simply because it’s not finite.

It is finite. Not infinite