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

[Virgil Caine]

28 minutes ago, Boon said:

What really is the difference between someone that YOLO's £50k into crypto, than one who YOLO's £50k into tech shares, or YOLO's £50k into new build flats?

The problem is the allocation of assets, not the underlying investment. Putting 90%+ of your net wealth into anything is dumb, putting 90%+ of your net wealth with leverage is extra dumb.

Yet people seem to treat these cases as different. For example the crypto investor is a degenerate, the heavily leveraged property investor is seen as some kind of brave risk taker who 'deserves' his profit.

The trouble is, it seems that there is no shortage of fools out there.

No difference at all. The factors that drive asset inflation are the same regardless of the vehicle of investment/ speculation which is supply, demand, the availability of credit and the place of the asset in Maslow’s hierarchy of needs. The crypto chart pretty much follows the monetary expansion that took place in the pandemic. The stimulus is now being withdrawn albeit slowly. At the same time people have other calls on their money such as putting fuel in their car, heating their homes and buying food which are all increasing in price. Compared with food, shelter and warmth owning a crypto currency comes pretty low down on the list of needs particularly as most of them have very limited utility as means of exchange. Speculators doubtless have also noticed this change and are moving their bets elsewhere as well.

[AWW]

4 minutes ago, Virgil Caine said:

The crypto chart pretty much follows the monetary expansion that took place in the pandemic.

The long term chart is also strikingly similar to the "anatomy of a bubble" chart. Currently in the "fear" phase with capitulation to follow.

The hodlers will find that what they are hodling is teh bga.

[Animal Spirits]

Norway threatens to abandon £4.5bn North Sea oilfield over windfall tax

https://12ft.io/proxy?q=https%3A%2F%2Fwww.telegraph.co.uk%2Fbusiness%2F2022%2F06%2F18%2Fnorway-threatens-abandon-45bn-north-sea-oilfield-windfall-tax%2F

[Option5]

5 minutes ago, Animal Spirits said:

Norway threatens to abandon £4.5bn North Sea oilfield over windfall tax

https://12ft.io/proxy?q=https%3A%2F%2Fwww.telegraph.co.uk%2Fbusiness%2F2022%2F06%2F18%2Fnorway-threatens-abandon-45bn-north-sea-oilfield-windfall-tax%2F

Energy prices aren't set by the oil and gas producers, it's set by the market, and is probably manipulated by traders to line their own pockets.

Put the windfall tax on trader's profits.

Note some of the traders are part of some of the oil companies.

[Boon]

13 minutes ago, Virgil Caine said:

No difference at all. The factors that drive asset inflation are the same regardless of the vehicle of investment/ speculation which is supply, demand, the availability of credit and the place of the asset in Maslow’s hierarchy of needs. The crypto chart pretty much follows the monetary expansion that took place in the pandemic. The stimulus is now being withdrawn albeit slowly. At the same time people have other calls on their money such as putting fuel in their car, heating their homes and buying food which are all increasing in price. Compared with food, shelter and warmth owning a crypto currency comes pretty low down on the list of needs particularly as most of them have very limited utility as means of exchange. Speculators doubtless have also noticed this change and are moving their bets elsewhere as well.

Yes quite.

For instance, I reckon 1% of my wealth now is in 'vintage tech', basically old electronics. 

Most of it has no utility now, but is popular on sites like Ebay.

I suppose in future it could change and a lot of it could end up worthless - ie the selling fees and postage fees outweigh what it is worth. Just because something is old and is of limited supply doesn't make it automatically valuable. 

However I don't really care if it goes to 0. It is just seen as holding cash in a different form and a possible hedge against inflation.

Of course even in the vintage tech field it is possible to overpay, maybe stupidly. For instance, a old Nintendo game sold for $660,000. To me, the equivalent of an NFT.

With the tech stuff I can pretty much accept many items will be volatile. Some may have no buyers at all during times of hardship because they don't do anything. However if there was times of lots of free money maybe there would be plenty of interest.

Is there much difference between this and someone who invested 1% in crypto? Probably no. Yet it does seem that people like making examples of the people who were overleveraged which (IMO) ignores that most people who invested just invested what they could afford to lose. But someone saying this is pretty boring, and doesn't make people feel better about themselves.... just human nature.

[Talking Monkey]

1 hour ago, DurhamBorn said:

Yes,but i wouldnt buy it due to being Europe weighted,i prefer the wealth managers because BTL is dead and massive amounts are headed their way over the next 15 years with that and probates.Far outstripping asset value falls.L+G and M+G for instance might end up huge landlords.Market is looking the wrong way on them as usual,worried about short term drops in AUM due to falls and inflation,but missing the massive movement of capital thats about to hit.I repeat BTL is finished for leveraged or small one or two house people.Takes time,but the direction is crystal clear.

DB wouldn't BTL be finished/ be a bad deal for the medium sized landlords too, those with say less than 10. They're going to get squeezed by maintenence and regulation costs with an assets possibly falling nominaly and definitely falling in real terms. 

[JMD]

On 18/06/2022 at 12:54, Harley said:

The trick to being 18 is to remember to do it again...

'SGT. at Arms' eh? ...'past' and 'future' eh?     The clues are all there plus I've been paying close attention to your sequence of pics Harley. Go on admit it, this one is you in your (slightly) younger days is it not ?!?!

[Ash4781b]

43 minutes ago, Virgil Caine said:

No difference at all. The factors that drive asset inflation are the same regardless of the vehicle of investment/ speculation which is supply, demand, the availability of credit and the place of the asset in Maslow’s hierarchy of needs. The crypto chart pretty much follows the monetary expansion that took place in the pandemic. The stimulus is now being withdrawn albeit slowly. At the same time people have other calls on their money such as putting fuel in their car, heating their homes and buying food which are all increasing in price. Compared with food, shelter and warmth owning a crypto currency comes pretty low down on the list of needs particularly as most of them have very limited utility as means of exchange. Speculators doubtless have also noticed this change and are moving their bets elsewhere as well.

I’m confused as the commentary is crypto crashes won’t impact wider economy. However, I thought they had value because one could use them to buy goods/services , settle debts etc. it reads like almost purely speculative (are people using them widely as means of exchange ?) and the floor prices of some of these things could be 0 ?

 

edited

[belfastchild]

2 hours ago, DurhamBorn said:

Houses will come down,but the young will of lost all their savings so cant take advantage.Wonder how many grannies left their grandkids £30k in their wills only for  them to lose it all in crypto.Its been an incredible scam though,maybe the biggest illusion since the tulip craze,but even worse.Some will of made life changing amounts and walked away of course,your just seeing the bag holders now.

Neighbours son did exactly this with roughly 8k inheritance from his granny. Hes a student but put half of it in 'buying the dip' in bitcoin just before Christmas.
Asked me to look over his stock portfolio when he came home at Easter. You can guess where the other half was 'invested'.
Probably got about 3k total now. Parents had split up and granny left money just to the grandkids. Parents are fucking fuming at him as both in rented houses etc etc and he will get nothing from them.

[MrXxxx]

24 minutes ago, Ash4781b said:

However, I thought they had value because one could use them to buy goods/services , settle debts etc. it reads like almost purely speculative (are people using them widely as means of exchange ?)

I think you have 'Hit the nail on the head' here...this is the issue, at the moment 'coins' are being used more for speculation [and so behave more like a stock] than for buying goods/services...when/if this changes [change prompted by the recent crash destroying speculators confidence?] then maybe they will behave more like a store of wealth/exchange.

[Ash4781b]

14 hours ago, Axeman123 said:

 https://archive.ph/NZaTL

Headline "Bank of England and Sunak Set to Step Up Fight Against Inflation"

"Britain’s policy makers are hardening their attitude toward inflation, preparing to deliver a tough dose of medicine at a time when a cost-of-living crisis is weighing down growth and consumers.

Prime Minister Boris Johnson’s government along with the Bank of England this week signaled a readiness to raise interest rates at an unprecedented pace to rein in prices, which are on track to leap more than 11% this year. 

Remarks from the Treasury and central bank indicate a switch of policy emphasis from supporting growth to preventing inflation seeping into wages and triggering a 1970s-style price spiral..."

Seems the 0.25% rise wasn't enough. Emergency rise to follow?

I Thought the treasury wanted wage rises and would take it back with tax and ni rises?

[Gin]

1 hour ago, THEFREEMAN said:

How do you break up with women

even if I only met them 3 times I still start crying when it ends

The problem some men have is they think all women are fragile . A few are of course , some cry but they can recover very quickly . Its often the guilt that eats men .

While women move on quickly even when dumped . They tell every one it was the mans fault anyway and that clears the way .

They have an advantage over men too . two x chromosomes . It gives them an edge over dumb males .

 

 

[THEFREEMAN]

You reckon the UK might get some real infrastructure again in the next 10 years?

Stuff like reopening and rebuilding all the train line and stations that were shut down post war? Maybe rebuild inner city tram lines, Or rebuild all the cycle lanes that were replaced with an extra lane for A roads

some of these shithole places in the north have become shitholes because there is literally no public transport

or will they just force everyone to sit in traffic on the M1 in an EV instead of a petrol car by taxing everyone

What I want to know is if the railways were shutdown for ‘losing’ money, why don’t they shut down the motorways when there has never been a car company that hasn’t gone bankrupt? Why do gubbermint cunts and lefties love EVs so much, and why do republicans and white van men love petrol cars so much? Why are they all obsessed with fucking sitting in traffic

[Loki]

3 minutes ago, THEFREEMAN said:

why do republicans and white van men love petrol cars so much? Why are they all obsessed with fucking sitting in traffic

We do it just out of spite

[leonardratso]

Well they said diesel was the saviour a few years back (decades?) Was hardly any diesel (derv) cars on the road before that, only big trucks and tractors were diesel. Wonder when they will change tack and tell us EVs are the killers, all those electrons and gasses are killing the people in the 100s of thousands every year, and 3/4/5/6G spectrum radiowaves are frying bats brains and turning them into rabid blood sucking monkeypox transferers who ignore LBGTQ people.

Sounds crackers eh? hehehe lets see how crackers it sounds in a few years time.

[Loki]

3 minutes ago, leonardratso said:

Well they said diesel was the saviour a few years back (decades?) Was hardly any diesel (derv) cars on the road before that, only big trucks and tractors were diesel. Wonder when they will change tack and tell us EVs are the killers, all those electrons and gasses are killing the people in the 100s of thousands every year, and 3/4/5/6G spectrum radiowaves are frying bats brains and turning them into rabid blood sucking monkeypox transferers who ignore LBGTQ people.

Sounds crackers eh? hehehe lets see how crackers it sounds in a few years time.

It would be interesting to see the EMF readings from those motors.  Could be insignificant, who knows?

[Persons unknown]

I

2 minutes ago, Loki said:

It would be interesting to see the EMF readings from those motors.  Could be insignificant, who knows?

I reckon they would be unbelievable! 

[leonardratso]

2 minutes ago, Loki said:

It would be interesting to see the EMF readings from those motors.  Could be insignificant, who knows?

 

should ask stuey, reckon hes pretty good at this.

[Starsend]

On 18/06/2022 at 12:19, Red Debt Redemption said:

Will you actually reach that limit and travel the world?

Will the world allow you to travel when you are ready?

Will you get the same experiences as a 20-30 year old at 50,60,70+?

Will you be fit enough health wise to travel at your limit?

Its all a gamble like anything in life. 

I find when I set limits I keep putting things off as other things come up. Deffo next year, or the next and the next because..

I hope so. I set targets a couple of years ago and am well on the way to hitting them. I decided that when I hit them then that's go to be it. It's a difficult one, I can already feel a part of me getting nervous. Giving up my job when they're not easy to come by at my age now; it's so easy to think that I just need another six months and then another, just got to get this first and then that... but I know that's a mistake I will regret, just got to force yourself to do it and I know I won't regret it.

Not gonna get the same experience I'd have got in my twenties but I reckon you can still get a pretty good experience, better than sitting behind a desk anyway.

You're right about health, it can start to go at anytime if you're not careful. My blood pressure / sugar was creeping up (like most people our age). Too much booze, too much food. That was one of my targets before I gave up work, to get in optimum health. I've been intermittent fasting for months now. Weight is approaching what it was at 20 years old, blood pressure etc now perfect. Tough giving up the beer and wine though but worth it, feel fantastic.

Yep, all a gamble but you can make your own luck as much as possible and hope for the best. 

[JMD]

19 minutes ago, leonardratso said:

Well they said diesel was the saviour a few years back (decades?) Was hardly any diesel (derv) cars on the road before that, only big trucks and tractors were diesel. Wonder when they will change tack and tell us EVs are the killers, all those electrons and gasses are killing the people in the 100s of thousands every year, and 3/4/5/6G spectrum radiowaves are frying bats brains and turning them into rabid blood sucking monkeypox transferers who ignore LBGTQ people.

Sounds crackers eh? hehehe lets see how crackers it sounds in a few years time.

Not crackers at all. I fully expect Richard Branson to announce that a close friend died of EV related cancer. (he's already got form on doing this!)

[Calcutta]

32 minutes ago, THEFREEMAN said:

You reckon the UK might get some real infrastructure again in the next 10 years?

Stuff like reopening and rebuilding all the train line and stations that were shut down post war? Maybe rebuild inner city tram lines, Or rebuild all the cycle lanes that were replaced with an extra lane for A roads

some of these shithole places in the north have become shitholes because there is literally no public transport

or will they just force everyone to sit in traffic on the M1 in an EV instead of a petrol car by taxing everyone

What I want to know is if the railways were shutdown for ‘losing’ money, why don’t they shut down the motorways when there has never been a car company that hasn’t gone bankrupt? Why do gubbermint cunts and lefties love EVs so much, and why do republicans and white van men love petrol cars so much? Why are they all obsessed with fucking sitting in traffic

EVs will work out too expensive for any normal people to own, so everyone will be stuck with renting them, using ubers or riding a bike. 

That's the plan I reckon. 

Government investing in trams and trains would be useful, thus they'll probably fuck it up. Any train/tram that needs to be fully stopped before you get on or off and where you can't open the windows is going to end up an expensive piss bucket and you'd be better off walking. 

[Starsend]

On 18/06/2022 at 13:31, DurhamBorn said:

Hundreds of ball bearings under floorboards.

I think iv worked 18 years in my life,thats a bit much really.I left a fantastic job at 31 with GSK,but i was in my prime and working shifts was missing out too much on life redundancy was on the table with a 50% boost to years in the DB pension then RPI linked,i knew the value of that from 10 to 15 years RPI linked.Il be honest here i loved women and i spent the next 6 years pulling and dating all over the country.I also even met a girl from Canada id first talked to when the internet had just started on ICQ the first chat program.We had been friends since,i used to send her Es inside tapes recorded at The Venue in Spennymoor,she was the most popular girl on campus for her parties with that music and chemicals,she adored me.She messaged me one day saying she was going to be in London on a work project (she was then and is now a film/tv producer) and it was our chance for a weekend.I can tell you it was incredible,Still friends now.

Another i ended up with lined her two kids up outside to shake my hand when i left,upper class,she was a big wig in the music business,David Gray of Babylon fame phoned her while i was,well you know enjoying her Hanging Gardens 

Up and down the length of these islands i travelled (and once over to Ireland),saw most of the country,stayed for free in all kinds of places,met nut jobs,beauty queens,a woman who played hockey for England to a woman from Glasgow who worked in Greggs.

I woudnt change any of it.The only thing though is my house came first,paid for and id never ever sell it then or now.I also of course had my investments and although not huge then very nice.The income from them gave me about half of my income.For me life is about moments,special times,and i always had the mentality that every now and again the universe would bow to me,not me to it.Most of my friends married at 23 etc and have had boring lives.They think two weeks in the med means they are living.Each to their own.Life goes too fast,50 now and you start to notice your going invisible,where at 30 id get the look and smile of women every day now its much rarer.I can say though having your own house was key,and thats the big injustice to the young,one that i think might be about to unwind.

 

Sounds like you had all your priorities bang on from an early age in life and you've lived a bloody good life as a consequence. I was clueless until much later in life and most of my life was that boring regular life, married with kids at 23 - but never too late to start putting your ducks in a row. Trying to pass on everything I know now to my children. The house is key I've found, made my life a misery as it was such a focus for so many years to get to own one. They are now completely beyond the reach of my children and I see the misery it causes them having to pay stupid rents. My last goal in life is to make sure they all own their own house before I kick the bucket. I live in the South where prices are ridiculous so no easy feat. The knowledge you've passed on to everybody in this thread has been a great help towards making that happen, thank you.

David Gray, one of my favourite all time albums is A new day at midnight, superb.

[Transistor Man]

On 17/06/2022 at 16:39, Transistor Man said:

 

The easy option will be too tempting: burning more brown coal.

 

 

[leonardratso]

16 minutes ago, Calcutta said:

EVs will work out too expensive for any normal people to own, so everyone will be stuck with renting them, using ubers or riding a bike. 

That's the plan I reckon. 

Government investing in trams and trains would be useful, thus they'll probably fuck it up. Any train/tram that needs to be fully stopped before you get on or off and where you can't open the windows is going to end up an expensive piss bucket and you'd be better off walking. 

best make em even more expensive as well;

https://oilprice.com/Energy/Energy-General/Energy-Transition-Goals-At-Risk-As-EU-May-Label-Lithium-As-Toxic.html

[Harley]

Those who'll never ride a Harley:

. Think they can predict the CBs

. Think it matters

. Don't do data

. Blabber generalities, not specifics

. Don't do real chart work

. Spout climate cultisms, etc

. Only make money off others backs