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

[Starsend]

48 minutes ago, ThoughtCriminal said:

When the Russians want to jail me for my tweets, incorrect use of pronouns and tell me a man can become a woman then I'll be sure to despise them.

 

As it is I'd happily hang almost every politician and journo in this country.

It's not a binary thing imo. I would also happily hang every politician in this country but I'd also happily hang Putin. Just because they haven't lost their minds to wokeness doesn't mean they're not cunts in other ways.

[HousePriceMania]

Anyone fancy a gamble on the banker establishment being in charge of all things democratic ?

[Starsend]

41 minutes ago, sancho panza said:

Picture,1000 words etc.

Simply incredible.but it's that old Hemingway quote again isn't it?

''How did you go bankrupt?''

''Gradually at first,then suddenly.''

What's deeply disturbing to me is that that is the chart of the world's reserve currency(for now).

There's no getting off that train once the politicans are on it.

We should have kept some.Strategically,the UK's had a shocking 30 years of mismanagement.First duty of any govt is to preotect it's people-that means economic/physical/cultural security.

Now we're heading for bankruptcy,wide open to invasion/external control,cold winters and cultural dilution.And yet to sort it out we have the people who created the crisis and didn't see it coming.

Don't worry we'll have mums in fighter jets soon patrolling Britain's borders (except during the Summer holidays).

[Harley]

Re. OXY and Buffet's big stake, a good question on the Market Huddle podcast, taking it private?

[sancho panza]

6 minutes ago, moneyscam said:

Hey SP. I would be guessing as much as anyone else even if it's an educated guess. Bear in mind that as far as fiat fx goes it's a relative game of who is the least ugly. Can cable go below parity? Absolutely because of massive balance of payments deficit and increasing budget deficits - the dreaded twin deficits that only the US can sustain (for a time) as USD is reserve currency. It is because of this reserve currency status that as things break down further I can see further flows to the USD and thus cable being pulled below parity. End of 2023 is a realistic scenario but I wouldn't bet the house on it as there are a lot of things that can happen between now and then.

As for interest rates, normally I would argue you need positive real rates so way above where we are now. However I think the inflationary shock which leads to demand destruction and reduction of aggregate demand will do most of the heavy lifting and so rates will not need to go above current inflation to achieve this outcome.

Thanks for the reply MS.Agreed ti's not one to bet the hosue on but interesting to see that you think it's realistically possilbe. UK politicains tend to forget why the US can run twin defictis and we shouldn't make a habit of it.Does look to me as if after 30 years the Punch bowl has been taken away.

I think @DurhamBorn made an excellent point a week or so back,that rasing IR's by 1% here is effectively a 50% increase which will have a huge effect on aggregate demand especially in a situation where so many consumers are leveraged heavily in terms of their disposable income.I think the UK is in uncharted waters in terms of levels of pirvate debt to GDP,let alone the twin deficits we;ve been running since the early 90's.

The corollary to that demand destruction is that it will have a potentially  disruptive effect in some asset markets-particualrly UK real estate which then in their tunrs could reinforce a downward debt deflationary spiral as people pay down loans/default

[Option5]

23 minutes ago, Starsend said:

It's not a binary thing imo. I would also happily hang every politician in this country but I'd also happily hang Putin. Just because they haven't lost their minds to wokeness doesn't mean they're not cunts in other ways.

 

[ThoughtCriminal]

23 minutes ago, Starsend said:

It's not a binary thing imo. I would also happily hang every politician in this country but I'd also happily hang Putin. Just because they haven't lost their minds to wokeness doesn't mean they're not cunts in other ways.

There's no comparison. Putin acts logically, in the interests of his nation.

 

Ours sell us down the river at every opportunity.

 

Putin hasn't even scratched the surface of what the UK and US have done over the years, and continue to do now.

[Plan-b]

51 minutes ago, nirvana said:

good eyes squire, it's called a bear market......I did try and point this out on friday, n'est ce pas?

 

If it is in a bear then it has a long way to fall to upset the long game holders. In fact the yellow metal has done better than even UK house prices bought with sterling over the last 20 years in quite a lot of the UK. Each to their own 'Innit' 

It's the pound that's fuct not gold 

 

[Harley]

3 hours ago, Errol said:

Dugin had nothing to do with Putin anyway. In Russia he is an irrelevance. It was the West that played him up and made him into some kind of important figure. Similar to Navalny, in that respect.

All part of the West's hoped for ramp down in Ukraine?  Gotta have a victory while dissing Zelensky in the establishment US press, etc, etc? 

[Errol]

1 hour ago, nirvana said:

good eyes squire, it's called a bear market......I did try and point this out on friday, n'est ce pas?

Gold in GBP isn't

[Harley]

1 hour ago, M S E Refugee said:

All I see is Russia acting in a logical manner and the West acting illogically.

For me it's got to the point where I can no longer believe anything the West says as I have been lied to and gaslighted too many times.

IMO, the West is not so much at "war" with Russia, etc but more it's own people as they lean against Russia and co to achieve it.  And that war is a money/resources share war as it ultimately always is.

[Starsend]

13 minutes ago, ThoughtCriminal said:

There's no comparison. Putin acts logically, in the interests of his nation.

 

Ours sell us down the river at every opportunity.

 

Putin hasn't even scratched the surface of what the UK and US have done over the years, and continue to do now.

Putin and his mates stole billions from the Russian people.

He's a cunt. Our cunts are even bigger cunts. I don't see your point in comparing really. They're all cunts to me in different ways.

[Pip321]

35 minutes ago, DurhamBorn said:

Its directly related to bennies and boomers pensions because there is simply little reward for work.New estates got 20% social housing on them,plus BTL bought some as well,so likely 30%.So you move in with you both working long hours with a big mortgage only to find out your neighbours arrived 5 weeks ago on a boat and or on bennies.Other side are a Brit bennie family with 3 kids out in the tiny garden pissed every night.

 

This might be just a good educated guess on something you ‘think’ is probably the case. Or maybe you have seen it. 

However, to confirm I know someone who has moved into a 4 bed detached new build home £400k in Jan 2021 and this is exactly the case. As an aside they bought comparatively well (some paying £475k for the same house)

The Alsatian and the very loud guy on the mobile from 6am at the rear speaking polish (we think), the parties (ok, occasional) across the street and the smell of weed have meant enough is enough. All benefits or working benefits and this new build estate is awful. But it looks lovely at first glance. 

Listed their house and sold subject to contract it £495k (with a couple of others on at £540k)….selling quickly and moving out of dodge first to get something in a more ‘established area’. They will happily exchange and rent for a short period rather than rush to buy because so little on….I will look for stuff for them, winter is a normally better buying season. 

[Axeman123]

45 minutes ago, Democorruptcy said:

It's entirely logical. Carney and his cronies have invested lots of money in the climate change stuff, if some of the big money loses faith in it and bails, the value of the climate change stuff could fall. Then Carney and his cronies would be left in the shit. They have to try keep the money flowing one way, to protect theirs.

Thing is though, all of that implies the flow is now against net zero and they are fighting a rear guard action. I will take that as a good sign.

[Funn3r]

2 hours ago, M S E Refugee said:

Thank goodness I have bought more Florins and Half Crowns off ebay over the weekend.

I can see Nationwide accepting them as payment for my Mortgage by next year.

How does this work exactly? Sounded so interesting that I started reading on ebay, and seems like 

SILVER FLORIN GEORGE V COINS 

SILVER CONTENT:
1911 TO 1919 IS 0.925 SILVER
1920 TO 1936 ARE 50% SILVER

So I looked at a 1915 coin which the seller is offering for £12.99 - the weight is not specified but wikipedia puts it at 11.3 grams if I read that right. Say that's 0.4 of an ounce assuming that the worn condition of the coin has not reduced that.  

So you're paying over 30 quid/ounce for .925 silver. Why is this better than to buy modern .999 Britiannia even though it's got VAT?

[BWW]

2 hours ago, HousePriceMania said:

and will stay at 15+ for ....

and svr or 2-5 year fixed rates for mortgages will hit ....

??

[Democorruptcy]

2 minutes ago, Axeman123 said:

Thing is though, all of that implies the flow is now against net zero and they are fighting a rear guard action. I will take that as a good sign.

The 13F filings for positions as they were at the end of June had to be done by last week. Maybe there were some changes that upset the climbies?

[M S E Refugee]

6 minutes ago, Funn3r said:

How does this work exactly? Sounded so interesting that I started reading on ebay, and seems like 

SILVER FLORIN GEORGE V COINS 

SILVER CONTENT:
1911 TO 1919 IS 0.925 SILVER
1920 TO 1936 ARE 50% SILVER

So I looked at a 1915 coin which the seller is offering for £12.99 - the weight is not specified but wikipedia puts it at 11.3 grams if I read that right. Say that's 0.4 of an ounce assuming that the worn condition of the coin has not reduced that.  

So you're paying over 30 quid/ounce for .925 silver. Why is this better than to buy modern .999 Britiannia even though it's got VAT?

The Sterling stuff is usually expensive but the pre 1947 Silver can be bought for a little above spot.

I also use topcashback and Nectar points to bring down the price.

Last week when the Silver price was a bit higher I bought 1KG of 50% Silver for £281 so basically that works out at £562 per kilo if I bought double the amount.

 

[Harley]

1 hour ago, sancho panza said:

Have you got a view MS on the possiblity of a sterling crisis before end 2023(sterling crisis defined as cable<1).

Also have you got a take on where UK IR's will need to go to get infaltion under control and whtehr they will be succesful.No pressure jsut interested in yor take.

This mess is unfolding quicker than I expected UK wise and I'm pretty releived we've alreayd moved our allotments into USD/PM exposure/Oilies before now.I'd hate to be selling cable at $1.18 but it might be better than parity in 6 months

also @baffledbyzirp

I'm moving my remaining UK bonds to USD bonds (incl. TIPS) despite the loss they're carrying.  I can't see the win.  Rates go up to stop currency decline or a currency decline.  I'm sure Sterling is due for a technical bounce regardless of rates but also sure that'll wash out over time.  I don't expect great things from USD or TIPS either (The Market Huddle just covered a bit on TIPS and the dearth of liquidity in 2020 is a concern).  Why bonds?  A good TIPS yield (very much atm) and overall asset allocation. 

[Harley]

1 hour ago, moneyscam said:

Hey SP. I would be guessing as much as anyone else even if it's an educated guess. Bear in mind that as far as fiat fx goes it's a relative game of who is the least ugly. Can cable go below parity? Absolutely because of massive balance of payments deficit and increasing budget deficits - the dreaded twin deficits that only the US can sustain (for a time) as USD is reserve currency. It is because of this reserve currency status that as things break down further I can see further flows to the USD and thus cable being pulled below parity. End of 2023 is a realistic scenario but I wouldn't bet the house on it as there are a lot of things that can happen between now and then.

As for interest rates, normally I would argue you need positive real rates so way above where we are now. However I think the inflationary shock which leads to demand destruction and reduction of aggregate demand will do most of the heavy lifting and so rates will not need to go above current inflation to achieve this outcome.

Forex trading is where the money is at the moment! 

[BWW]

4 hours ago, Democorruptcy said:

Right, so now my taxes are only going to keep zombie companies going instead of zombie households? Keep that executive pay flowing? Sorry but I'd like a return to capitalism, businesses going bust if they aren't viable instead of them keeping profits but any losses socialised and paid by taxpayers. It's subsidy after subsidy, let's have a good clearout, no pain no gain.

Whilst I agree, you have businesses like pubs whose real estate should be protected as pub or sell to state at cost.

They should also be supported with tax breaks. No duty on alcohol consumed on premises, reduced vat for eat/drink in. bysiness rates scrapped perhaps in exchange for being required to share parkingand public toilets with non customrts.

Food producers should also get tax breaks where needed.

Support businesses that make community or are essential for survival. Let the others sink or swim.

[Starsend]

Evidence, what kind of man goes after a kid's ice lolly!

[marceau]

13 minutes ago, Starsend said:

Putin and his mates stole billions from the Russian people.

He's a cunt. Our cunts are even bigger cunts. I don't see your point in comparing really. They're all cunts to me in different ways.

Putin was the least worst option given what had happened to Russia in the 90s. If you are genuinely interested there's a good book called 'Godfather of the Kremlin' which details the period of Putin's rise. The author, Paul Klebnikov, was killed for his writing.

[Lightscribe]

5 minutes ago, Funn3r said:

How does this work exactly? Sounded so interesting that I started reading on ebay, and seems like 

SILVER FLORIN GEORGE V COINS 

SILVER CONTENT:
1911 TO 1919 IS 0.925 SILVER
1920 TO 1936 ARE 50% SILVER

So I looked at a 1915 coin which the seller is offering for £12.99 - the weight is not specified but wikipedia puts it at 11.3 grams if I read that right. Say that's 0.4 of an ounce assuming that the worn condition of the coin has not reduced that.  

So you're paying over 30 quid/ounce for .925 silver. Why is this better than to buy modern .999 Britiannia even though it's got VAT?

The problem is that physical has left paper prices. I was getting old pre-1920 silver coins up until a year or so back for around the price of spot.

The attraction is that when our currency goes down the toilet (and others too) is that small little coins have predefined verification and weight.

If gold starts running to anywhere near the price it should be, then silver will too. Having the ability to exchange small transactions for physical silver could be more advantageous than cutting/clipping etc.

[BWW]

4 hours ago, RJT1979 said:

What's to stop Russians in the UK now killing celebrity children or politicians children in revenge. Popcorn 🍿 

please tell me not carrie's dog.

it.s all getting very fishcalledwanda.