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

[Starsend]

1 hour ago, DurhamBorn said:

They get lots of their ideas from this thread and out work,then flesh it out into articles.They never credit us though.To be fair though at least they are getting it out there.They need to really push the bennies and public sector unfunded pensions consuming so much while producing nothing as the main problem.I was talking to an old squeeze yesterday,she is an estate agent/letting agent in my home town.She said they had let 65 houses this year,only 4 paid their own rent,61 bennies.She said she saw working kids looking in the windows,but pushed out by bennies

Out of interest, how do you know that? Wouldn't surprise me though, very few journalists seem capable of producing their own decent work these days.

 

Shocking figures about the number of people paying their own rent, completely unsustainable.

[Starsend]

1 hour ago, baffledbyzirp said:

The burden of increased heat and energy costs will certainly hit the private sector hard. I imagine that leisure and retail will be in the front line. How much will it cost to provide heating and lighting within a shopping centre? Pubs and restaurants face a combination of factors; higher wages, higher product costs, increased rates and fuel/ heating at a time when consumers are tightening their belts. Energy dependent industries including steel, aluminium, glass, chemicals and heavy manufacturing will cease to be viable.

However, my primary concern is for the public sector, particularly local authority funded services. Schools, libraries, hospitals, swimming pools and public spaces are going to become uneconomic to run and maintain. The only option is to let them rot or increase taxes, either locally or centrally. What will the response of TPTB be? No party will win an election on a platform of increased taxes given the current economic situation. More printing and fantasy economics is a possibility, but at some point the market will realise that the funny money they are being offered in return for tangible goods is worthless. 

The inescapable conclusion is that our whole system, fragile and bankrupt though it is, depends on cheap energy. We relied on Russian fuel to insure international spot prices remained payable. Collectively the West told Russia to shove their oil and gas. Russia duly obliged and started to export increased volumes to India, China, Africa and Saudi. The West gave a massive leg up to its main competition and committed economic suicide to prove a point. Our moral superiority will not keep us warm this winter.

I cannot imagine how much it's going to cost to heat public swimming pools this Winter, especially if it's a cold one. I reckon councils will just shut them down saying it's too expensive.

[Harley]

20 minutes ago, Yadda yadda yadda said:

The West at least partly provoked the Ukraine war. Yes, both sides are using it for other purposes. There was no need for overtures to Ukraine. The involvement of the Biden family in oil and gas business in Ukraine was clearly utterly corrupt. Especially when Biden had control over massive 'aid' payments to the country.

The US will be fine. They have their own energy. They're sacrificing Europe and European leaders are traitorous scum for going along with it.

Boris blew his Churchillian moment.

[Starsend]

36 minutes ago, Harley said:

Woodside's chart seems to have sorted itself out a bit at long last.  It's been emotional.  Shows a bit of a symmetrical triangle formation atm which is quite common across the sector.  There I go again being too optimistic.  AUD stocks rarely do well for me.

I'm thinking of dumping my BP and buying Woodside. Couple of reasons, firstly the constant squawking for windfall taxes on BP (not sure if the Aussies are clamouring for the same with Woodside though), bigger dividend, better long term growth prospects and I read something briefly which I need to investigate further about BP selling off Mexican assets so they could invest further into green shit.

[M S E Refugee]

15 minutes ago, Starsend said:

That top one, nearly 40%, just cannot see that one lasting - then again if you got two years of that.

Are their profits so high purely because shipping rates exploded for a while, when all those containers rates shot up through covid? If , they've got to come right down at some point surely?

Shipping is a very cyclical business, the good thing about Zim is they are an Israeli company so I would expect them to be very shrewd.

I know that in the Oil Tanker business that many old vessels were scrapped when metal prices were high and those Ships haven't been replaced.

Also with the West's crazy sanctions Shipping may do well, who knows!

[Lightly Toasted]

1 hour ago, Plan-b said:

Dr Tim Morgan is extremely bearish on the UKs chances

"If the new PM goes for tax cuts, the Bank will have to counteract with rate rises."

He's only considering the case where there's a pure tax giveaway; maybe he thinks tightening elsewhere is politically impossible. Personally I think it's essential.

Anyway, it's more complex than he implies.

[feed]

12 minutes ago, Lightly Toasted said:

"If the new PM goes for tax cuts, the Bank will have to counteract with rate rises."

He's only considering the case where there's a pure tax giveaway; maybe he thinks tightening elsewhere is politically impossible. Personally I think it's essential.

Anyway, it's more complex than he implies.

And pretending the BOE has much choice doesn't help.

They're sandwiched between the FED with a high DXY on the verge of pause or pivot and the ECB terrified of moving because of Italy and others.  +/- 0.5 is about all the manoeuvrability they've got, and what difference will that make.    

 

[Axeman123]

I am oddly upbeat about the UKs prospects.

Watched the Panorama about the failed mini-bonds etc under Bailey's watch at the FSA on iplayer last night. Nothing in that was new, and yet suddenly it is front and centre. That doesn't just happen. I take this as a sign Bailey is on the way out, and a shift in monetary policy is coming.

Truss is really telling it like it is. We have all been here before where they make the right noises and then carry on with business as usual of course, but this time feels different. Even lefty newspapers are starting to sound like us on here. The overton window has shifted dramatically, and that generally precedes action. Even Pishy has been trying to outdo her on DOSBODianism, the consensus in the leadership contest would have been considered radical just a year ago!

I agree that Britain is on a knife edge, but I see signs that the right people get it and have sensible plans. Maybe I am just a dreamer of course.

[Bobthebuilder]

1 hour ago, Jay said:

Wow..the saddest post I have read the credit thread..some of us have gotten out of the gutter and forgotten it exists and what it looks like..hope she is ok..

we talk about societal collapse, recession, stagflation, deflation and war..what it actually means and consequences..once it moves from posts to actual reality will be a punch in the face..the law of unintended consequences means stories like that become common..bad times and things happening to good people..a lot of good people…you can get a flavor of this by watching programmes from the 70s and 80s..grim..on the plus side better community spirit..

Don’t really fancy going back to that..a good reality check and time to count my blessings..I will survive but many won’t..I am now inspired to do my bit by increasing my tax bill by making more profits..be lucky..

This thread inspired me to look back at programmes from the late 1970s early 1980s, start of the deflation cycle. This is why I post up Jack Hargreaves films from time to time, almost a melancholy feeling that runs through them, as if he knows he was at the end of a big cycle, and life would never be the same again.

The metal hook in this short clip is a cooking iron to hang a cooking pot or kettle over a camp fire.

My wife managed to get the lass a temporary job at her place, saved her arse some what.

[ThoughtCriminal]

1 hour ago, M S E Refugee said:

I think Rafi Farber will be correct and many assets will hyper-deflate against Gold and Silver.

Are you buying at the minute? I'm still far to heavy in cash, I'm far too pessimistic on stocks so I'm pondering buying more silver and gold.

 

Think SP said being neutral isn't really an option and I have to agree. Sitting in cash waiting for BK is looking like slow suicide.

 

[Starsend]

13 minutes ago, Axeman123 said:

I am oddly upbeat about the UKs prospects.

Watched the Panorama about the failed mini-bonds etc under Bailey's watch at the FSA on iplayer last night. Nothing in that was new, and yet suddenly it is front and centre. That doesn't just happen. I take this as a sign Bailey is on the way out, and a shift in monetary policy is coming.

Truss is really telling it like it is. We have all been here before where they make the right noises and then carry on with business as usual of course, but this time feels different. Even lefty newspapers are starting to sound like us on here. The overton window has shifted dramatically, and that generally precedes action. Even Pishy has been trying to outdo her on DOSBODianism, the consensus in the leadership contest would have been considered radical just a year ago!

I agree that Britain is on a knife edge, but I see signs that the right people get it and have sensible plans. Maybe I am just a dreamer of course.

I hope you're right but personally I don't think so.

I remember Cameron telling it like it was as well, all of them in fact.

I recall reading once how many Conservative party MPs had multiple BTLs, it was something astonishing, 70% or something stupid. No way will they let their little empires go, they'd rather take down the entire country such is their selfishness.

We'll see, I have no doubt some of them understand the problems, it's the entrenched vested interests that prevent the right course of action being taken.

The big mofo crash might be better, I think we'd have a better chance of things getting rebuilt properly then plus huge opportunities along the way for those with an eye open.

[ThoughtCriminal]

Speaking of Thungella........

 

530% in a year!

 

Hope you all choke on your divis.

 

Bastards. 😂

[Axeman123]

Just now, Starsend said:

I hope you're right but personally I don't think so.

I remember Cameron telling it like it was as well, all of them in fact.

I recall reading once how many Conservative party MPs had multiple BTLs, it was something astonishing, 70% or something stupid. No way will they let their little empires go, they'd rather take down the entire country such is their selfishness.

We'll see, I have no doubt some of them understand the problems, it's the entrenched vested interests that prevent the right course of action being taken.

I'd prefer the big mofo crash personally, I think we'd have a better chance of things getting rebuilt properly then plus huge opportunities along the way for those with an eye open.

I totally get where you are coming from. The thing is, I don't see Cameron or other MPs as really running the country. I would compare them to middle management. The real people in charge think in terms of multiple generations of ongoing priviledge.

As an analogy think back to Brexit and the prorogation etc. MPs played their europhile games, right up to the point the country started looking ungovernable as public anger became dangerously intense. I vividly remember one shellshocked-looking Brexit-supporting MP lamenting he would happily see the palace of Westminster bulldozed into the Thames after what was happening there, and it seemed to capture the essence of the times. Almost overnight MPs all fell into line and gave BJ his GE, and we rapidly Brexited without even a murmur of substance. What happened? IMO the real decision makers got scared, and started making phone calls.

[Starsend]

2 minutes ago, ThoughtCriminal said:

Speaking of Thungella........

 

530% in a year!

 

Hope you all choke on your divis.

 

Bastards. 😂

I bought Arch Resources a couples of years back. Not done as well as Thungela but tripled in price. They weren't paying a divi at the time either, they were so beat up. They are now yielding nearly 10% and that's after the price has tripled.

Lovely, filthy, dirty coal.

[feed]

6 minutes ago, Starsend said:

I hope you're right but personally I don't think so.

I remember Cameron telling it like it was as well, all of them in fact.

I recall reading once how many Conservative party MPs had multiple BTLs, it was something astonishing, 70% or something stupid. No way will they let their little empires go, they'd rather take down the entire country such is their selfishness.

We'll see, I have no doubt some of them understand the problems, it's the entrenched vested interests that prevent the right course of action being taken.

The big mofo crash might be better, I think we'd have a better chance of things getting rebuilt properly then plus huge opportunities along the way for those with an eye open.

I don’t think it’s guaranteed, but they’ll throw everything at preventing a real crash or collapse.  The risk with a collapse is it may result in real change.   And no one with real power wants real change. 

Look at what they did to prevent a deflationary collapse.  Imagine what they'll do for an inflationary one. 

Axeman123's, house price inflation to moderate deflation and house price deflation to moderate inflation, may well be on the money.  

 

 

 

[BurntBread]

2 hours ago, M S E Refugee said:

I have been buying as much 50% Pre 1947 Silver as I can lay my hands on, it looks like it may come in useful.

A scrap dealer would give you £2.78 for a Pre 1947 Florin (10 pence).

I guess everyone has their view on what is the "right" amount of precious metals to own. I have no clear opinion on that, but here is a (possibly unreliable) bit of information to put it into context.

I looked at the US geological survey to find out how much of the different elements have so far been discovered (i.e. not everything has been got out of the ground yet), and then divided that by the world population of 7 billion. That givens an idea of the average amount of PM wealth, were it equally distributed (in an @NTB-ish sort of way):

Copper: 100kg per person

Silver: 250g per person

Gold: 30g per person

[M S E Refugee]

9 minutes ago, ThoughtCriminal said:

Are you buying at the minute? I'm still far to heavy in cash, I'm far too pessimistic on stocks so I'm pondering buying more silver and gold.

 

Think SP said being neutral isn't really an option and I have to agree. Sitting in cash waiting for BK is looking like slow suicide.

 

I have slowed down buying as I have got a decent amount of Silver but I am buying  small amounts of Pre 1947 Silver when ever I can buy it near spot.

I think the Pre 1947 stuff could be very useful as it comes in small increments.

There will be no CGT on it either as it was legal tender.

[sancho panza]

3 hours ago, Barnsey said:

Are you writing for the Telegraph now @DurhamBorn?

https://www.telegraph.co.uk/news/2022/08/17/entitlement-britain-becoming-poor-country-many-people-dont-care/

Britain has turned into a three-speed society, with some people, including blue-collar workers in warehouses, in factories, in delivery vans, as well as plenty of white-collar professionals, working flat out, much harder than they ever did before, their output closely monitored and controlled by technology, but with their pay held back by productivity constraints.

The picture is different in office-based sectors where the working-from-home and HR cultures have spiralled out of control, and there has been a proliferation of non-jobs across the corporate world. Office workers spend too much time communicating with each other, which is easy, rather than creating value, which is hard. Poor, lazy, tick-box management is rife, some of it caused by regulatory idiocies. Many corporate types are resting on their laurels, insulated by cheap credit, lulled by rocketing house prices into thinking they have made it in life and can relax.

Last but not least, parts of the economy are suffering from the continued dysfunctionality of the welfare state: despite Universal Credit, there are insufficient incentives for some groups to increase their working hours. This is an important reason why so many vacancies for lower-paid jobs remain unfilled, and, combined with our poor education and skills, for our extreme reliance on immigrant labour.

All three challenges need to be addressed differently. We need to be honest about the new British disease: our staggering lack of competitiveness, poor levels of investment, the low quality of so many of our schools, the weakness of our skills, the disaster that is our infrastructure, our sky-high taxes, our deadly bureaucracy, and that fixing all of this will be painful. Incentives to work and invest need to be turbocharged: far too many people pay far too high marginal tax rates, and many youngsters are discouraged by our broken housing market.

Firms will need to be encouraged into investing a lot more. The economy requires more competition. The public sector needs radical reform and contraction. Crucially, higher interest rates would lead to a more rational allocation of capital, and the demise of wasteful low-return jobs and practices. One of the biggest barriers to change is the prevalence of middle-class Nimbyism, or at least the idea that things are good enough as they are, and that all new development – of homes, airports, power plants or water reservoirs – must be stopped.

Capitalism itself cannot survive another decade of zero growth in real incomes. The public only tolerates the profit motive and freeish markets if people feel that a rising tide is lifting all boats; but as incomes stagnate, they become ever more sceptical. But Britain is suffering from zombified social-democracy, over-regulation and monetary socialism, not from genuine capitalism. We wouldn’t be stagnating if a few million acres had been handed over to housing, or if monetary policy wasn’t obsessed with a proto-Keynesian desire to bail out the over-indebted, or if a flat tax had been introduced in 2010, or if the Oxford-Cambridge-London triangle had been turned into a giant high-productivity science enterprise zone.

Boris Johnson was meant to understand all of this but sadly didn’t, and three years have now been wasted. Liz Truss, a principled libertarian, does get it, and, crucially, isn’t scared of being blunt. The Tories can’t afford to mess this up again: it’s Truss’s way, hard graft and all, or a Labour landslide in 2024.

That's spot on barnsey,thanks for posting ....like @DurhamBorn says,great to see this getting discussed in teh MSM.

2 hours ago, M S E Refugee said:

More Russian oil headed for Asia – Bloomberg https://www.rt.com/business/561017-russian-oil-headed-asia/

MSE,polite request,I really enjoy your posts,but these RT ones when I clcik on them,I get a blank screen because I live in a demcocracy.

Can you advicse how you get around the blocking but also can you psot a screenshot or soemthing like that for us read that contains the important info please.I know it's a hassle but I'd really like to read the importnbant newsflow in that link.

2 hours ago, DoINeedOne said:

So a honest question what are people views of what will happen over winter and next year with these high gas and electric prices

Im sitting here wondering about certain companies that own or require properties think offices, pubs or large retail stores, just how will they survive going forward, we're starting to see companies struggling or posting images of huge bills whilst i can't predict what will happen im just wondering what peoples views are

I think a lot of companies with big areas to heat will be screwed.Especially the ones who've sold off their freeholds and rented the properties back as leases eg Enterprise Inns etc.This will be the death of private equity I suspect.Their margins were thin and based on cheap gubbermint moeny.

here's one example-Im not an accountant dyor etc.I know we have a few M&S fans on here but the margins look wafer thin given there the higher end of the market.

for some reason on this computer I get the breaking news thing aacorss the years but they are the last four financials(if anyone could tell me how to get rid of it,I'd bne grateful,doesn't happen on my laptop)

total debt to equity is one to look at.

they're working a 2.8% net profit margin,operating profit could get mullered if they're heating/leccy/wage bills rocket.

https://www.investing.com/equities/marks---spencer-group-financial-summary

 

 

 

 

 

 

 

 

 

[Starsend]

1 minute ago, Axeman123 said:

I totally get where you are coming from. The thing is, I don't see Cameron or other MPs as really running the country. I would compare them to middle management. The real people in charge think in terms of multiple generations of ongoing priviledge.

As an analogy think back to Brexit and the prorogation etc. MPs played their europhile games, right up to the point the country started looking ungovernable as public anger became dangerously intense. I vividly remember one shellshocked-looking Brexit-supporting MP lamenting he would happily see the palace of Westminster bulldozed into the Thames after what was happening there, and it seemed to capture the essence of the times. Almost overnight MPs all fell into line and gave BJ his GE, and we rapidly Brexited without even a murmur of substance. What happened? IMO the real decision makers got scared, and started making phone calls.

Interesting and I hope you're right. It shows the importance of people making their opinions known and not holding back on what they think of the people running this country into the ground.

I've got talking to many, many people over the years and when they twig that you're safe to talk to they're all so fucking angry at what is going on - burn down Parliament with the MPs in it angry.

I've never broken a law in my life (well apart from a Ford Escort I nicked when I was a teenager, oh and a Cortina as well, then there was the Porsche building...) anyways, I digress; after a brief lawless episode in my teens I married and bought up three children, worked at a desk five days a week for decades and never broke another law. I don't have a violent bone in my body and believe in the rule of law. If they could see the hatred I and so many others like me hold for them I honestly think they'd fucking crap themselves.

[M S E Refugee]

2 minutes ago, sancho panza said:

Can you advicse how you get around the blocking but also can you psot a screenshot or soemthing like that for us read that contains the important info please.I know it's a hassle but I'd really like to read the importnbant newsflow in that link.

I'm not sure how you get around it but a few people on here have posted how to circumvent it.

I do usually try and give brief synopsis of the stories as I'm aware that it is frustrating for people that can't access RT.

[M S E Refugee]

11 minutes ago, BurntBread said:

I guess everyone has their view on what is the "right" amount of precious metals to own. I have no clear opinion on that, but here is a (possibly unreliable) bit of information to put it into context.

I looked at the US geological survey to find out how much of the different elements have so far been discovered (i.e. not everything has been got out of the ground yet), and then divided that by the world population of 7 billion. That givens an idea of the average amount of PM wealth, were it equally distributed (in an @NTB-ish sort of way):

Copper: 100kg per person

Silver: 250g per person

Gold: 30g per person

I think 6 months to 12 months living expenses would be good amount to have but it all depends on personal circumstances I suppose.

[geordie_lurch]

5 minutes ago, M S E Refugee said:

I'm not sure how you get around it but a few people on here have posted how to circumvent it.

I do usually try and give brief synopsis of the stories as I'm aware that it is frustrating for people that can't access RT.

If you aren't using a VPN as standard to get around our great leader's good intentions then stick the URL in https://12ft.io/ e.g. https://12ft.io/proxy?q=https%3A%2F%2Fwww.rt.com%2Fbusiness%2F561017-russian-oil-headed-asia%2F or alternatively https://archive.ph but that tends to be slower

[DurhamBorn]

5 minutes ago, sancho panza said:

That's spot on barnsey,thanks for posting ....like @DurhamBorn says,great to see this getting discussed in teh MSM.

MSE,polite request,I really enjoy your posts,but these RT ones when I clcik on them,I get a blank screen because I live in a demcocracy.

Can you advicse how you get around the blocking but also can you psot a screenshot or soemthing like that for us read that contains the important info please.I know it's a hassle but I'd really like to read the importnbant newsflow in that link.

I think a lot of companies with big areas to heat will be screwed.Especially the ones who've sold off their freeholds and rented the properties back as leases eg Enterprise Inns etc.This will be the death of private equity I suspect.Their margins were thin and based on cheap gubbermint moeny.

here's one example-Im not an accountant dyor etc.I know we have a few M&S fans on here but the margins look wafer thin given there the higher end of the market.

for some reason on this computer I get the breaking news thing aacorss the years but they are the last four financials(if anyone could tell me how to get rid of it,I'd bne grateful,doesn't happen on my laptop)

total debt to equity is one to look at.

they're working a 2.8% net profit margin,operating profit could get mullered if they're heating/leccy/wage bills rocket.

https://www.investing.com/equities/marks---spencer-group-financial-summary

 

 

 

 

 

 

 

 

 

We talked years ago about how i advised my son not to go to uni (hes not the type) and my mate got him on at the local huge Aldi warehouse.Lots of friends scoffed whos kids were going to uni etc and his mams friends,he said i trust my dad thanks.Well he has worked hard there,loves it,goes out with the lads he works with and has just been promoted.£16.50 an hour 34 hours a week with extra hours each day if wanted.No student debt,about as safe a company to work for as there is with what we face,10 minutes from home so low fuel costs to get to work,and when he clocks out zero contact from work.The promotion is because they are putting an extra shift on,they are getting busier.Morrisons must be getting screwed here i suspect,glad i offloaded my shares to those private equity lot 

[wherebee]

5 minutes ago, Starsend said:

. If they could see the hatred I and so many others like me hold for them I honestly think they'd fucking crap themselves.

Indeed, Starsend.  Same here - law abiding all my life in several countries.  Now I would happily see some of those responsible for the past few years hang on gibbets for what they have done to humanity.  Millions are going to die from their vaccines, their green climate policies, and their energy crisis amplified by the Ukranian sideshow.  The 300k+ dead in Ukraine so far is a taster of what is coming.

They have destroyed western civilisation in 50 years.  The pinnacle, in my view, of human achievement was the period post war where in the west the average person could live in peace in a homogenous community, raise a family, and be educated for free in how the universe works and how humans should be striving for the stars.  They have destroyed that and in exchange have degenerate relationships, economics, and families.

They deserve to hang high.

[Yadda yadda yadda]

47 minutes ago, Axeman123 said:

I am oddly upbeat about the UKs prospects.

Watched the Panorama about the failed mini-bonds etc under Bailey's watch at the FSA on iplayer last night. Nothing in that was new, and yet suddenly it is front and centre. That doesn't just happen. I take this as a sign Bailey is on the way out, and a shift in monetary policy is coming.

Truss is really telling it like it is. We have all been here before where they make the right noises and then carry on with business as usual of course, but this time feels different. Even lefty newspapers are starting to sound like us on here. The overton window has shifted dramatically, and that generally precedes action. Even Pishy has been trying to outdo her on DOSBODianism, the consensus in the leadership contest would have been considered radical just a year ago!

I agree that Britain is on a knife edge, but I see signs that the right people get it and have sensible plans. Maybe I am just a dreamer of course.

Talk today that Truss wants to merge the FCA, PRA (Prudential Regulation Authority - part of the BoE) and the PSR (payment services regulator - already part of the FCA). The sort of shake up that would see Bailey out on his ear. Makes sense. There is a lot of duplication to get rid of.