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

[Pip321]

53 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.

Whilst (today) I disagree with your optimism it is genuinely nice to hear it….uplifting if you like. 

Maybe you are a dreamer….but you’re not the only one.😉

[DurhamBorn]

1 hour ago, Starsend said:

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.

They put articles up a week or so after we highlight it on this thread,even using some terms iv used on here not used anywhere else,100% they read this thread and get direction from it.To be fair they do quite a good job of writing up the articles mostly and getting it out there.They dont nail it of course to the real problems but they are getting close.I guess if they mentioned us we would be flooded here and we dont want that.

One for them.Remind Truss Durham is sitting on 300 years of coal.Imagine if a Tory PM re-opened the Durham coalfield.The first Tory PM welcomed to the Big Meet in Durham.They can invest in the carbon capture tech and convert DRAX back over while they sink the shafts and build the mines.

[feed]

2 minutes ago, DurhamBorn said:

They put articles up a week or so after we highlight it on this thread,even using some terms iv used on here not used anywhere else,100% they read this thread and get direction from it.To be fair they do quite a good job of writing up the articles mostly and getting it out there.They dont nail it of course to the real problems but they are getting close.I guess if they mentioned us we would be flooded here and we dont want that.

One for them.Remind Truss Durham is sitting on 300 years of coal.Imagine if a Tory PM re-opened the Durham coalfield.The first Tory PM welcomed to the Big Meet in Durham.They can invest in the carbon capture tech and convert DRAX back over while they sink the shafts and build the mines.

monetary socialism is a brilliant term. 

The more I think about it, the more I think working, as in an exchange of my time for a salary was probably the dumbest thing to do for the last 10 years.   Labour has had almost no value in the late disinflationary cycle.

It's Just unfortunate that it was my peak earnings potential at age 40 to 50.  And by the time labour will have real value again, I’ll be too old to take advantage of it..   Timing is everything.  
 

[Red Debt Redemption]

17 hours ago, M S E Refugee said:

They have been building loads of 4 bedroom houses in Carlisle and they have been selling like hotcakes.

These ones are a few hundred yards from the M6.

I found this property on the Rightmove Android app and wanted you to see it: https://www.rightmove.co.uk/properties/122261180

 

Sounds great. Most still on £300-400 fixes.

Its council tax, energy, food that kills the North. Hartlepool, Durham, Carlisle etc.

[M S E Refugee]

Flotilla of diesel ships from Asia coming to Europe’s rescue https://www.rt.com/business/561075-asia-europe-diesel-flows-surge/

A record amount of Ships are sailing to Europe from Asia to supply them with diesel.

I would love to know where the Oil originates from!

[ThoughtCriminal]

2 hours ago, Lightscribe said:

If this happens, I think we’ll see the US try to destroy the price of paper gold.

From zerohedge:

According to the Russian Finance Ministry, precious metals prices will be fixed either in the national currencies of key member-countries or using new monetary units used in international trade—for instance, the new BRICS currency proposed by Putin.

The Finance Ministry wants to make membership in this organization attractive to all market participants, especially China, India, Venezuela, Peru and other South American countries, as well as Africa. It aims to swiftly destroy the monopoly of LBMA and to provide for stable development of the precious metals sector.

In essence, Russia proposes to create a market for gold, platinum, etc., which will be regulated by countries that control the resources for these metals. This would be, simply put, a revolution. On the basis of this new market, it intends to further the system of bilateral trade in national currencies that specifically excludes dollars, euros and pounds.

And now, some statistics on the world gold supply. The production share of the US and other hostile nations* produce a grand total of 22% of the world’s gold. Eurasian Economic Union, BRICS and Africa, together, produce 57%—already a controlling share. Now add Peru and Venezuela, and the number goes up to 62%.

To put it in the plainest terms possible, Russia is colluding with a number of other countries to exclude the dollar, the euro and the pound from the system of international settlements, starting with precious metals but not necessarily stopping there. These countries control a lion’s share of gold production. For starters, Russia has fixed the price of gold in rubles at 5000₽/g, which works out to $2,447.17 per troy ounce. This compares rather favorably to the current LBMA fix of $1737.84. The days of LBMA’s ability to drive down gold prices using paper gold manipulation appear be running out.

 

 

This is huge if it goes ahead.

 

One way or another, we're getting a major war. No way the West are just letting control slip through their fingers without a fight 

[Pip321]

Top share tip.

Rio has had a decent run and allowing for the divi I am going to bail today with a view of buying in a bit lower in a week or two. (Trading I know)

Maybe buy into some of the other suspects on this thread which have fallen back a little  

My tip is….whenever I sell a share it normally romps up 20%….so Rio will be one to watch.😆😆

[sancho panza]

2 hours ago, Plan-b said:

Dr Tim Morgan is extremely bearish on the UKs chances

I apologise but 7 psots on one page that I feel duty bound to reply to.This is superb.

I pciked up Dowd & Buckner banking apper that changed forever the way I analyse banking stocks from Dr Tim's comments section.

Interesting that he's now moving up the rhetoric scale and over a similar timeframe to some basement dwellers who are sjut seeing the newsflow and adjsuting their tiemscales.I read thsi thread every day I can and collectively you can see the changing atmospherics down here if you look.A lot of posts drawing forward UK demise if certain paths aren't taken particualrly from thread macro lead @DurhamBorn

We really are at an inflection point and it's only jsut beginning to dawn on me how big it is in terms of chooisng the UK's direction over the next decade.We as a family are heavily hedged by oil/gold/baccy but I'm looking at people I've known all my life and hoping they'll be ok.

My sympathy is limited mind.For years we've had people looking down on us for renting while I built out the portfolio .Now I'm sat here and have become like @Errol and @M S E Refugee wondering whether we've enough gold.

I think we're approaching that pivotal moment when we'll appreciate the old maxim that gold doesn't make you rich but it stops you getting poor.time will tell.

2 hours ago, DurhamBorn said:

My roadmap says UK collapse 100% certain on the present runway.So from the macro,and the energy situation we have a pincer movement.He is right to mention though 100% can quickly become 50% before events happen.He is also right to mention the two items that the BOE must do.Increase rates if Truss wins,refuse to QE if Dishi wins.The first option is the right one,but to save systemic collapse house equity will have to be destroyed.

 

One of the reasons I enjoyed this thread from the early days was how much better your dollar calls were than bankers with billions to spend on computers

That bit in bold me of Ernest hemingway quote from his novel

Just saying this situation has turned nasty quite sharply.It's like the odd occasion at work, the atmospherics are all good then some switch gets flicked and a blade comes out.

https://quoteinvestigator.com/2018/08/06/bankrupt/

“How Did You Go Bankrupt?” “Two Ways. Gradually and Then Suddenly.”

2 hours ago, DurhamBorn said:

The voters voted for the right policies,even staunch Labour areas around me,ex mining areas voted Tory to slash welfare and immigration,Tories did the opposite.Read the room wrong,or deliberate.

I'll declare a Ukip membership 2006 to until it fell apart psot farage.

For me the parliamentary tories are owned by the 1%.

They won't save us.Socialism for the 1% & the 40% getting life on bennies and capitalism for the worker bees.

2 hours 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.

So much to appreciate in that psot.

Compellingly logical.As Shaun Richards said

''the only people we seem to be sanctioning is ourselves.''

 

In terms of moral superiority,I'm splitting hairs but I'm not sure we have much over the Ukraine.US/EU machinations appear to be in part responsible.

[M S E Refugee]

2 minutes ago, Red Debt Redemption said:

Sounds great. Most still on £300-400 fixes.

Its council tax, energy, food that kills the North. Hartlepool, Durham, Carlisle etc.

I shudder to think how much debt the 30 something wannabe WAG's and their Husbands must be in, around the newly built executive Housing developments in the North of England.

[Barnsey]

54 minutes ago, DurhamBorn said:

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 

Wouldn't be surprised about Morrisons going under given it's more expensive than not only Aldi and Lidl, but also Tesco and Sainsburys. Most of their supermarkets feel dingy as fook.

[DurhamBorn]

40 minutes ago, M S E Refugee said:

I shudder to think how much debt the 30 something wannabe WAG's and their Husbands must be in, around the newly built executive Housing developments in the North of England.

As my dad used to say about those so called executive housing developments "they are so shit even the fucking Jackdaw's dont want to sit on the roofs"

[MightyTharg]

Gross margin sounds good at 33%. What happens to get it down to 3% net profit?

[Harley]

2 hours 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'm about 35% equity and 25% hards like PMs.  Was a higher equity figure.  Anyways, now back above my NAV at the start of the year due to the equity.  Not so negative out there from that POV.

[Harley]

2 hours 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.

One person, one term, one anything is not going to fix the work of so many over so long.  As always, something will be done but it will yet again only further entrench and enhance the position of the rentiers and other vested interests.

[Harley]

2 hours ago, Axeman123 said:

IMO the real decision makers got scared, and started making phone calls.

They did, and then started to properly prepare for the next time!

[Virgil Caine]

3 hours 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.

To be honest I am amazed Bailey has lasted this long. The BOE inflation forecasting has been woeful. Presumably he is being saved to be offered up as a public sacrifice  at a suitable moment.

Quite a few quasi governmental like the BOE and the utility regulators are coming under the spotlight now for failing to come any where near matching their supposed brief. 

[ThoughtCriminal]

18 minutes ago, Harley said:

I'm about 35% equity and 25% hards like PMs.  Was a higher equity figure.  Anyways, now back above my NAV at the start of the year due to the equity.  Not so negative out there from that POV.

So you're about 40% cash Harley?

[Axeman123]

Just now, Virgil Caine said:

To be honest I amazed Bailey has lasted this long.

It does seem like his time to be sacrificed has come. The fear would be that as a distraction, and more of the same policy.

[DoINeedOne]

2 hours ago, M S E Refugee said:

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.

I had a load of these from a big bag of old coins i had as a kid

Problems is after sorting them out i don't have a clue where i have put them

[ThoughtCriminal]

This is the definitive example of giving zero fucks.

[Harley]

3 minutes ago, ThoughtCriminal said:

So you're about 40% cash Harley?

Pretty much.  5% bonds, split US and UK long duration government and TIPS, and 35% cash, split deposits, and UK and US short term government bonds, etc.

Just a snapshot.  Too much cash (especially GBP) but not seeing much more out there atm within the mandated (by me!) risk reward setup.  Most equities were drawn down to their initial ladders and only recently have started to be ramped back up for some holdings (based on their charts).

[Yadda yadda yadda]

39 minutes ago, ThoughtCriminal said:

This is the definitive example of giving zero fucks.

Surprising that high rates are seen as less of an electoral problem than high inflation. Wages must be keeping up.

HSBC MSCI Turkey is up a little on the day. Lira down slightly less than the market is up.

[manservantjerkins]

2 hours ago, Barnsey said:

Wouldn't be surprised about Morrisons going under given it's more expensive than not only Aldi and Lidl, but also Tesco and Sainsburys. Most of their supermarkets feel dingy as fook.

Worked as a department "manager" at a new build store a good few years ago; one of the conditions of the planning permission being granted meant they had to offer a large chunk of jobs to the people at the job centre opposite. Holy shit, some people are beyond useless. One man with a 27 inch neck who had to wait 6 weeks for a special order shirt, another grown man cried when asked why it took him 5 minutes to put ONE case out on a shelf.

They also hired some consultancy to come up with a new management structure: instead of department manager, supervisor, worker, they decided on multiple "co-managers", so immediately peoples backs were up when they found out other people's salaries, no one was actually in charge, and nothing got done. 

When they took over Safeway, they got rid of all the scanners etc, preferring manual, paper based counts, then realiised that was retarded and brought them back in at significant cost and reduced functionality.

I hope they go out of business
 

[DurhamBorn]

Turkey are ahead of the game,inflation will slow there,their bonds have been rallying for a while.

[JMD]

6 hours ago, M S E Refugee said:

https://www.express.co.uk/life-style/life/886196/why-is-it-always-cold-in-office-women-temperature-thermostat-science

Anyone remember these type of stories from a few years ago?

Cold temperatures in the Office are sexist!

That article references a report called 'female thermal "demand''', sounds about right. Women prefer the office temperature to be 25C and the men 22C apparently! And I note that this year the debate had morphed into the topic of the female menopause where if companies only suggested providing additional office fans during a hot summer this would be a case of mysogeny?

Of course these stories are really tragic examples of how the West has become arrogantly self-satisfied, naval-gazing, and dangerously and irresponsibility smug with itself over recent decades. However events can change quickly and this year we saw how rapidly the geopolitical tables can turn, whereby Putin has had the 'temerity' to shake a threatening stick at the West. He has metaphorically raised up the 'Russian Bear' and somewhat ironically directed it into 'proding back' at the West! The pathetic, self-flagelating and confused (was it?) responce from the West has been very telling. 

I bet that 'Female Thermal Demand' debate will now be relegated to the sewer of debate where it belongs to be... However the self-serving media have already moved on and are already ramping their next replacement shiny-new-shite story of 'Foreboding Thermonuclear Devices' (i know thats very clumsy, but I'm not a journalist!).