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

[Chewing Grass]

1 minute ago, Pip321 said:

Bit off topic, but this sets me back a little. What worries me about this is that some of the companies on whom we depend as shareholders are being run in the same way as some governments.

Ie A board of directors are controlling billions of pounds (wat above their pay grade really)….pulling out a ‘justifiable’ few tens of mill each to buy homes, yachts and a lifestyle, throwing some money at shareholders to keep them quiet and then heading for the exit door after 5 years or so. The businesses might be seen as the directors golden ticket and they can fleece the tax man, the customers, the staff and the shareholders. 

You have hit the nail on the head, which is why big business buys off politicians and therefore regulation.

This is why both America and China are the most corrupt countries in the world.

In fact I would say it is the USA that is the most corrupt as their legal system effectively legalises it.

[23rdian]

2 hours ago, Chewing Grass said:

The best cars are generally the ones people have low expectations of but are looked after due to the type of ownership.

If they are widely, leased, screwed and abused before hitting the used market then they are expensive and unreliable to own.

I also think they took the Japanese designs which were already good and improved upon them.

[JMD]

4 hours ago, Lightly Toasted said:

The closest he got was probably this:

“You know," said Arthur, "it's at times like this, when I'm trapped in a Vogon airlock with a man from Betelgeuse, and about to die of asphyxiation in deep space that I really wish I'd listened to what my mother told me when I was young."
"Why, what did she tell you?"
"I don't know, I didn't listen.”

In 'Restaurant at the end of the Universe', he did have a character spending a year dead for tax reasons!

[Loki]

1 minute ago, JMD said:

In 'Restaurant at the end of the Universe', he did have a character spending a year dead for tax reasons!

Isn't that sort of what the economy has been doing?

[leonardratso]

34 minutes ago, Loki said:

Isn't that sort of what the economy has been doing?

2 years

[tank]

20 hours ago, AWW said:

I don't think property values bear any relation to rental values. Flats in London/SE yield 2-3%.

Plenty of other government interventions have pushed up prices, but HB isn't one of them.

IMHO of course.

It depends on what section of the housing market you look at. The upper tier in London/SE and a handful of other places is basically foreign money parking and/or domestic equity swapping.

The middle to lower tiers are a different story.

Take a look around the regions propped up by huge welfare spend and state employment e.g. NHS, LAs, emergency services etc. Durham likes to mention the fat single mum in his close living in a family house rented off her retired public sector parents. HB is clearly being used to pay off countless BTL mortgages and inflate prices across regional Britain.

[arrow]

On 29/06/2022 at 03:24, tank said:

The biggest beneficiaries of large scale welfare spending are not the tax credit Karens and Shazzas, certainly not the £75 a week doleys.

It's those who own and rent property, plus all manner corporate rentiers from media to fast food. Shazza rents using HB, she then spends every penny she gets getting daily food deliveries, her Sky, Netflix etc and so on. She saves nothing. No wonder the government are keen to hand her more. Despite what Johnson and Sunak say in public, what they really want is to inflate the debt away.

Not a popular view on here, but a lot of the older folk you refer to are very aware that they benefit from the welfare spend as a large chunk of it is funneled into the property market via HB. It sets a floor under rents and, in turn, pushes up the value of property across the board. Most people over 50 who work and own property have benefited from HB even if they don't BTL. Many will own housing that is now x2/3/4+ what they paid. Remove the bennie prop and the housing market collapses.

Lots of different points you make. Been discussed here many times.

Yes btl benefits from it but that's not the whole story.

The benefit system now is Brown's doing and has not been reformed enough by governments since. It's been made worse by this government.

It's transferring the value of labour of workers to bennies so that the incentive to work is reduced or non existent so that workers give up and stop working. Already the state was taking huge amounts of the value of work from workers but now that burden is increasing. The incentives to stop work are increasing as benefits are increasing more than workers pay. Government spending is increasing. It's taxing workers more. This means that the inflation you mention in other posts cannot do its job in rebalancing the economy. The boe can, at the moment, no longer buy government debt. It may well lead to a collapse.

Every bennie has an equal vote to a worker. You're not going to get bennies saying the system is unfair to workers and needs to be reformed so that they get less money and workers more. Combine this with the msm/BBC/sky etc seeing any bennies cut as a calamity then you have politicians who can't do what must be done.

Going from the bennies who live around me they get huge benefits from this system. Bennies do have a better life than a lot of workers. It's just not net Netflix. They can spend a lot more time with their kids. They go on holidays. They get nice cars. The ones next to me have come back from holiday and got a new car. They're not the only ones. They do save money. They don't spend it all. The ones next door to me have their relatives keep their money so that their bennies don't get cut.
 

[spygirl]

9 minutes ago, arrow said:

Lots of different points you make. Been discussed here many times.

Yes btl benefits from it but that's not the whole story.

The benefit system now is Brown's doing and has not been reformed enough by governments since. It's been made worse by this government.

It's transferring the value of labour of workers to bennies so that the incentive to work is reduced or non existent so that workers give up and stop working. Already the state was taking huge amounts of the value of work from workers but now that burden is increasing. The incentives to stop work are increasing as benefits are increasing more than workers pay. This means that the inflation you mention in other posts cannot do its job in rebalancing the economy. The boe can, at the moment, no longer buy government debt. It may well lead to a collapse.

Every bennie has an equal vote to a worker. You're not going to get bennies saying the system is unfair to workers and needs to be reformed so that they get less money and workers more. Combine this with the msm/BBC/sky etc seeing any bennies cut as a calamity then you have politicians who can't do what must be done.

Going from the bennies who live around me they get huge benefits from this system. Bennies do have a better life than a lot of workers. It's just not net Netflix. They can spend a lot more time with their kids. They go on holidays. They get nice cars. The ones next to me have come back from holiday and got a new car. They're not the only ones. They do save money. They don't spend it all. The ones next door to me have their relatives keep their money so that their bennies don't get cut.
 

People on benefits, as a rule, don't vote.

Pussy footing about benefits changes is daft.

Simply reducing the TC add on cash and bumping up the hours to qualify and denying all bennies and free public services to migrants/non citizens would get the UK well down the line.

Ideally youd want bennies to be contribution based and run out after 5 years of claiming them.

As it stands, the vast amount of working age bennies are given to people whove never worked much if at all - single parents.

[baffledbyzirp]

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

This quote is attributed to Lord Woodhouselee, Alexander Fraser Tytler (1747-1813) although its authenticity is disputed. At its core it identifies that an unequal democracy will always incentivise those with less to use their vote to unjustly enrich themselves i.e. the tyranny of the majority. No doubt that is why the suffrage was only originally extended to men of property. 

The current system bestows the right to vote on virtually anyone without the obligations membership of society implies. In Plato's republic citizens would be shamed and daubed with red paint if they failed to fulfil their civic duties. Our world has become dominated by entitlement rather than duty and is worse for it.

 

[AWW]

2 hours ago, tank said:

It depends on what section of the housing market you look at. The upper tier in London/SE and a handful of other places is basically foreign money parking and/or domestic equity swapping.

The middle to lower tiers are a different story.

Take a look around the regions propped up by huge welfare spend and state employment e.g. NHS, LAs, emergency services etc. Durham likes to mention the fat single mum in his close living in a family house rented off her retired public sector parents. HB is clearly being used to pay off countless BTL mortgages and inflate prices across regional Britain.

I wouldn't be so sure that those BTL mortgages are being paid off... values depend on credit availability and bear no relation to rents, which depends on incomes (including HB).

[AWW]

22 minutes ago, spygirl said:

Ideally youd want bennies to be contribution based and run out after 5 years of claiming them.

I agree that benefits are too generous, but what do you do with these people after five years? Put them on the streets?

[Castlevania]

10 hours ago, spygirl said:

Wll 3G are a massive fucktarded PE parasite, who merged with Kraft, who are fucktarded parasites.

And now they are trying to push tge cost if true fuckup in consumer.

I reckon it'll fail, and 3g-kraft-heinz will go back to their parts.

https://finance.yahoo.com/news/kraft-heinz-disaster-shows-brutal-224231597.html

https://finance.yahoo.com/news/kraft-heinz-failure-put-3g-144124013.html

 

Technically Kraft sold the processed foods part of the business to 3G. They kept the confectionary (chocolate, biscuits, chewing gum) business and renamed themselves Mondelez. 3G then merged what they bought into Heinz. It’s been a disaster for everyone involved apart from Mondelez/the original Kraft shareholders.

[arrow]

22 minutes ago, spygirl said:

People on benefits, as a rule, don't vote.

Pussy footing about benefits changes is daft.

Simply reducing the TC add on cash and bumping up the hours to qualify and denying all bennies and free public services to migrants/non citizens would get the UK well down the line.

Ideally youd want bennies to be contribution based and run out after 5 years of claiming them.

As it stands, the vast amount of working age bennies are given to people whove never worked much if at all - single parents.

The ones round here vote. They get their vote labour posters up every time. Not that the Tories would do anything differently. Yes a lot is working benefits on part time working.

[spygirl]

1 minute ago, AWW said:

I agree that benefits are too generous, but what do you do with these people after five years? Put them on the streets?

You are ndking the mistake that all people on bennies are like Joey Deacon.

Most will gets job and support themselves.

You can offer v basic housing and limited food tokens n workfare for the rest.

Councils have a duty to provide housing. Theres no reason why it cant be a bunk bed in a HMO with limited facility.

 

[Phil]

1 minute ago, AWW said:

I agree that benefits are too generous, but what do you do with these people after five years? Put them on the streets?

Perhaps a 5 yr roll out of council house building would catch em. Help reduce HPI . Give 5 yrs work . Gotta go to work now. Just my thoughts.

[spygirl]

2 minutes ago, arrow said:

The ones round here vote. They get their vote labour posters up every time. Not that the Tories would do anything differently. Yes a lot is working benefits on part time working.

Putting a poster up is not voting.

Reading the polling card, working out where it is, walking to polling station Walking to the polling between 8am n 9pm.

Most bennies bunnies will fail on at least one of those.

[CVG]

23 minutes ago, spygirl said:

8am n 9pm

I know that you probably read yours, but it's 7am to 10pm.

[DurhamBorn]

3 hours ago, tank said:

It depends on what section of the housing market you look at. The upper tier in London/SE and a handful of other places is basically foreign money parking and/or domestic equity swapping.

The middle to lower tiers are a different story.

Take a look around the regions propped up by huge welfare spend and state employment e.g. NHS, LAs, emergency services etc. Durham likes to mention the fat single mum in his close living in a family house rented off her retired public sector parents. HB is clearly being used to pay off countless BTL mortgages and inflate prices across regional Britain.

All true,but shes not fat,shes very attractive,but then she would be,she spends all her day doing a beauty routine and the gym.Public funded police pension bought the house,not public funded LHA paying it off,then he will give it to her i suspect.Free house in nice area.Young couples have to look at crappy terraces that used to be £25k

[AWW]

33 minutes ago, spygirl said:

You are ndking the mistake that all people on bennies are like Joey Deacon.

Most will gets job and support themselves.

You're making the mistake that all people on benefits are employable.

They can only get a job if someone's willing to pay them.

[DurhamBorn]

Bennie reform is simple,replace child amounts with "family premium" ,so once you have a child you get the premium,but thats it,no extra for 2nd ,3rd child etc,say £65 a week on top of the £75 a single person gets.Means test away at 25% from £5k.Rent base on that,so two bedrooms only.Fund councils to build shared facilities housing like old peoples homes are like,so you can have 3 beds there,but shared kitchen,bathroom.Everyone can get a room if needed,but not very nice for longer term.

Another that would really help would be to extend bennie cap to those working and on sickness benneis.

Most of the ones driving around here in Range Rover on bennies is because their partners work but arent down as with them.I dont think they police it at all now,everyone i know on bennies is defrauding on one way or another.

Very likely we are at a tipping point where welfare goes up quicker than can be sustained now QE is over.Wealth taxes or bennie cuts.

[Boon]

One thing is, the government can afford to ignore the fat chavs on bennies.... even the news portrays their sob stories disingenuously - for instance, the 'too poor to afford food' always has an out such as people being fat, or when people complain about being poor they are usually ill-educated or lazy.

I mean, the £20 UC uplift that disappeared, aside from initial coverage, went without a whimper. That is despite the fact that inflation hits the poorest the most, they have less discretionary spends to cut back on.

Sharply rising interest rates to 3% coupled with winter might start to affect the middle homeowning classes, and their problems will be presented with much more sympathy, as if it isn't their fault. And unlike the bennie chavs there is a real whipsaw effect for some. Consider the case of someone forgetting to remortgage. Or struggling to sell their flat and prices go down even more. For the leveraged it is a quick jump from (illusory) wealth to being poor.

I do think there will have to be some kind of special homeowner benefit unveiled. Something like a government-backed remortgage, or a genuine 'help to sell' bung. Government ends up owning stakes in peoples homes as a result.

[spygirl]

32 minutes ago, AWW said:

You're making the mistake that all people on benefits are employable.

They can only get a job if someone's willing to pay them.

All people are employable - at some rate.

If not then hover them up and put them 3 to a room in a HMO and given them broom to push 9-5

Everyone becomes employable when the alternative is not very nice.

 

[DurhamBorn]

Markets are starting to price now for rates being higher for longer by the looks of it.They will get around to pricing inflation higher for longer too.

[spygirl]

25 minutes ago, DurhamBorn said:

Bennie reform is simple,replace child amounts with "family premium" ,so once you have a child you get the premium,but thats it,no extra for 2nd ,3rd child etc,say £65 a week on top of the £75 a single person gets.Means test away at 25% from £5k.Rent base on that,so two bedrooms only.Fund councils to build shared facilities housing like old peoples homes are like,so you can have 3 beds there,but shared kitchen,bathroom.Everyone can get a room if needed,but not very nice for longer term.

Another that would really help would be to extend bennie cap to those working and on sickness benneis.

Most of the ones driving around here in Range Rover on bennies is because their partners work but arent down as with them.I dont think they police it at all now,everyone i know on bennies is defrauding on one way or another.

Very likely we are at a tipping point where welfare goes up quicker than can be sustained now QE is over.Wealth taxes or bennie cuts.

R$.

Back on the farm.

Strawberry pickers - Romania and .... Indonesia.

Local MP moron Goowill - Ireland have had to fly in 500 people from Brazil ..

Both UIK + Ireland have been swamped by migrants in the last 20 years.

Noone is doing anything fuckignproductive.

 

 

 

 

[Castlevania]

1 hour ago, DurhamBorn said:

All true,but shes not fat,shes very attractive,but then she would be,she spends all her day doing a beauty routine and the gym.Public funded police pension bought the house,not public funded LHA paying it off,then he will give it to her i suspect.Free house in nice area.Young couples have to look at crappy terraces that used to be £25k

Gift it once all the kids are 18+. As long as you live 7 years after that date, no inheritance tax. Makes a lot of sense if you won’t need the money in retirement.