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

[Gin]

9 minutes ago, ThoughtCriminal said:

Amazing how barely anyone realises what's coming.

Everyone and his dog have been spoiled these last fifty years . No real hardships . I talk to my wife about what I think is coming and she is one to listen , because as a child her family had some tough times .

But  even so I still feel like I am actually out of step with things when driving on the M5 yesterday and see all the shiny new EV`s . The cars queuing up at drive through Costas etc, then things hit home again when I see diesel at £2 a litre .

[Plan-b]

1 hour ago, ThoughtCriminal said:

This guy is worth a follow. Anonymous energy analyst/trader, he called the coming cluster fuck in detail way before anyone else.

A Lot of the UKs food (and more besides) comes from or Via Europe, if Europe shuts down it's looking like Q3/Q4 is gonna be a shit-show. Very worrying

[Majorpain]

12 minutes ago, Plan-b said:

A Lot of the UKs food (and more besides) comes from or Via Europe, if Europe shuts down it's looking like Q3/Q4 is gonna be a shit-show. Very worrying

Its not actually that bad, the biggest "problem" is that you wont be able to get fresh produce all year round and it will be back to seasonal or tinned goods if globalisation breaks down.  Not ideal, but UK won't starve unless fertiliser/diesel becomes unobtanium.  Govt food report is packed with interesting info:

https://www.gov.uk/government/statistics/united-kingdom-food-security-report-2021/united-kingdom-food-security-report-2021-theme-1-global-food-availability

Quote

The UK is largely self-sufficient in barley and oats, and 81% self-sufficient in milling wheat (slightly higher for wheat overall), which is the most significant grain crop for food consumption in the UK. It is not likely or desirable for this figure of 81% to rise much higher, as the remaining percentage is largely made up of hard wheat types not suited to the UK’s climate and soils. Further to this, global competition in wheat production and prices means there is significant economic risk involved with trying to fully meet domestic milling needs, since any surplus could be undervalued relative to the costs incurred during production. UK farmers instead grow what they are best able to, a mix of milling and feed wheat according to market demand and prevailing weather conditions.

For these reasons, the mix of grain grown in the UK differs somewhat from the grain consumed in the UK. Grain alone does not provide a healthy and nutritious diet or meet consumer demand for a varied diet. However, from a purely calorific perspective, the (below average) grain yield in 2020 of 19 million tonnes would be sufficient to sustain the population. It is equivalent to 283kg per person, 0.8 kilos per day. A kilo of wheat provides 3,400 calories (and barley slightly more at 3520 calories), making 0.8 kilos of grain over 2,600 calories, compared to recommended calorie intake of 2 to 2500 for adults. From these figures it is easy to demonstrate that, even without accounting for other domestic products like potatoes, vegetables, grass-fed meat and dairy, and fisheries, current UK grain production alone could meet domestic calorie requirements if it was consumed directly by humans in a limited choice scenario.

 

[belfastchild]

16 minutes ago, Gin said:

Everyone and his dog have been spoiled these last fifty years . No real hardships . I talk to my wife about what I think is coming and she is one to listen , because as a child her family had some tough times .

But  even so I still feel like I am actually out of step with things when driving on the M5 yesterday and see all the shiny new EV`s . The cars queuing up at drive through Costas etc, then things hit home again when I see diesel at £2 a litre .

I went out for a walk last week and had two people beeping at me whilst walking on the pavement. Apparently I was blocking their ability to park on the footpath next to KFC. Very aggressive whilst sitting in their cars.
I glared at both of them but if Id have waited on them getting out of the cars Id have been waiting on them a long time. Besides which it wouldnt have been a fair fight, particularly if they had fallen on me.

Ive just got to the stage where fucking collapse cant come quick enough. I came from fuck all and can quite easily go back to it.

Todays experiment will be overnight oats made with home made kefir and garden strawberries (didnt that used to be called gruel? ;-))

[DoINeedOne]

80 per cent of all Brits have less than £500 in their account as hordes of people are slipping into debt

The number of customers with persistent debt problems has jumped by almost a third as the cost-of-living crisis bites further, the boss of Lloyds said this morning.

Mr Nunn told BBC Radio 4’s Today Programme that Lloyds research shows three-quarters of its customers are worried about recent price hikes and the impact this is having on savings.

“Around 80 per cent of individuals and UK customers and families have less than £500 worth of savings in their current account and their savings account.”

“They might have money elsewhere but what we can see is less than £500.”

Lloyds also confirmed that around 20 per cent of customers were cutting back on discretionary spending in order to keep more funds to use on essential items.

Nevertheless, the group also said credit card spending on travel is up 300 per cent and suggested there was still positivity in some areas of the economy.

Mr Nunn suggested there could be a danger that the country could talk itself into a worse financial situation.

 

[Boon]

I dunno if there is a motive behind that Lloyds headline and if it is somehow gamed to produce it.

For instance any pensioner with an account with them I think would have more than £500. Maybe it is an aggregate of all accounts including the dormant ones?

What the fucking press don't report is what everyone else is seeing: clear that a lot of people have gotten poorer, but the upper 10% have gotten much, much richer. Why is that?

Unfortunately a good chunk of the poor also like to pretend to be rich.

[Plan-b]

18 minutes ago, Majorpain said:

Its not actually that bad, the biggest "problem" is that you wont be able to get fresh produce all year round and it will be back to seasonal or tinned goods if globalisation breaks down.  Not ideal, but UK won't starve unless fertiliser/diesel becomes unobtanium.  Govt food report is packed with interesting info:

https://www.gov.uk/government/statistics/united-kingdom-food-security-report-2021/united-kingdom-food-security-report-2021-theme-1-global-food-availability

 

Thanks for that, its somewhat reassuring. 

If the last few years are anything to go by then I don't totally trust the gov to be correct or honest enough for me not to do anything.

So I will be stocking up on essentials that will get used however it turns out.

 

 

 

[Yadda yadda yadda]

21 minutes ago, Majorpain said:

From these figures it is easy to demonstrate that, even without accounting for other domestic products like potatoes, vegetables, grass-fed meat and dairy, and fisheries, current UK grain production alone could meet domestic calorie requirements if it was consumed directly by humans in a limited choice scenario

There is your anti-meat agenda. No or little grain for meat production. Grass fed only.

[M S E Refugee]

25 minutes ago, DoINeedOne said:

80 per cent of all Brits have less than £500 in their account as hordes of people are slipping into debt

The number of customers with persistent debt problems has jumped by almost a third as the cost-of-living crisis bites further, the boss of Lloyds said this morning.

Mr Nunn told BBC Radio 4’s Today Programme that Lloyds research shows three-quarters of its customers are worried about recent price hikes and the impact this is having on savings.

“Around 80 per cent of individuals and UK customers and families have less than £500 worth of savings in their current account and their savings account.”

“They might have money elsewhere but what we can see is less than £500.”

Lloyds also confirmed that around 20 per cent of customers were cutting back on discretionary spending in order to keep more funds to use on essential items.

Nevertheless, the group also said credit card spending on travel is up 300 per cent and suggested there was still positivity in some areas of the economy.

Mr Nunn suggested there could be a danger that the country could talk itself into a worse financial situation.

 

I wonder when the Masses will Wake up to the fact that the Government can do fuck all to help them.

Many people will be forced to do something they have never done in their lives which is take personal responsibility for their actions.

[Lightly Toasted]

37 minutes ago, Majorpain said:

Its not actually that bad, the biggest "problem" is that you wont be able to get fresh produce all year round and it will be back to seasonal or tinned goods if globalisation breaks down.  Not ideal, but UK won't starve unless fertiliser/diesel becomes unobtanium.  Govt food report is packed with interesting info:

https://www.gov.uk/government/statistics/united-kingdom-food-security-report-2021/united-kingdom-food-security-report-2021-theme-1-global-food-availability

 

That abundant grain is leveraged off imported energy, fertiliser, machinery & parts though. They acknowledge this in the section on inputs:

Agricultural inputs
Agricultural production puts strain on key inputs such as fertilisers and labour as well as natural capital resources such as water, soil, and land. Increased global pressure to intensify food production to meet demand may also exacerbate the harmful impacts agricultural practices and the food system have on the environment and wildlife in the form of habitat destruction and pollution. Combined, these may undermine the fundamentals upon which production systems rely if production cannot become more sustainable...

The solutions to this kind of thing are rather long term, e.g. the suggested transition from importing phosphate rock to using manure -- off the top of my head I would say that the only source manure available in sufficient quantities is going to be sewage, which implies a costly, time-consuming infrastructure investment before fertiliser products become available.

[Axeman123]

29 minutes ago, M S E Refugee said:

I wonder when the Masses will Wake up to the fact that the Government can do fuck all to help them.

Many people will be forced to do something they have never done in their lives which is take personal responsibility for their actions.

Both things would be resisted until there was no other alternative IMO. Most people under 30 would be genuinely terrified at the prospect of real consequences and no do-overs, it would be so far outside their life experience.

57 minutes ago, DoINeedOne said:

80 per cent of all Brits have less than £500 in their account as hordes of people are slipping into debt

I have mentioned before a mate that has £300/month left after direct debits, and I think he is the more typical one (out of the two of us).

[snaga]

2 hours ago, ThoughtCriminal said:

Or, do we get windfall tax on the "greedy" power companies?

or worse, emergency nationalization.

[baffledbyzirp]

We inhabit a world where people are increasingly alienated from the financial consequences of the decisions they make. 

The Tory leadership campaign will be fought on the battleground of who can offer the most rather than reducing spending, paying down debt and encouraging work. The cost of the giveaways, in the form of tax cuts and increased spending, will ultimately fall on future governments, when Rishi or whomever is comfortably retired living his billionaire hedge fund international jet setter lifestyle.

Similarly those who live on overly generous benefits force the burden of their indolence on to the working population and future generations. 

Why can't any candidate say "we are bust, hugely in debt and can not afford endless benefits, an enormous inefficient public sector, and foreign military campaigns?" 

In Latin the phrase 'qui non laborat non manducet' means, he who does not work does not eat. Friedman later paraphrased the epigram by claiming 'there is no such thing as a free lunch.' A return to these simple premises would perhaps prevent the inevitable debt induced collapse. Don't hold your breath. We are a bunch of whores willing to sell our vote to the highest bidder. Collectively we will bring about our own destruction and then seek to blame somebody else.  

[Noallegiance]

7 minutes ago, baffledbyzirp said:

Why can't any candidate say "we are bust, hugely in debt and can not afford endless benefits, an enormous inefficient public sector, and foreign military campaigns?" 

A couple of them are saying enough in code. It lets those of us who understand know that they know, but is vague enough to not do anything when the great unwashed come knocking.

Being as we know that the fix requires a seemingly self-induced policy-driven economic nightmare to begin to reverse the last 40 years, I'm hoping for the best of both worlds - the right people in government to pick up the pieces when the system inevitably implodes, but those same people must get in and tinker around the edges to ensure what happens doesn't look like their fault.

[DoINeedOne]

9 hours ago, JMD said:

One of my favourite money managers:Gavekal, and where 2 Frenchmen talk macro, productivity, inflation, energy. Much of it already discussed on here but also some interesting investment ideas.        Watch from 40 mins on, beginning is just charts.                           

      https://research.gavekal.com/content/webinar-investing-in-the-age-of-weaponization/?utm_campaign=TraderFerg&utm_medium=email&utm_source=Revue newsletter

Thanks for sharing that, just finished it great discussion worth watching the beginning too some interesting charts

[StrugglingMillennial]

I was just having a chat with a delivery driver that comes into my work place a few times a week, I've known him for years and I always ask how's work e.t.c

He works for UPS and it turns out his depot has been quiet for the last month/6 weeks which isn't normal until the kids start to break up from school.

I think with the comments from other forum users it's quite clear that things are slowing down.

[Pip321]

I think sentiment feels very cagey at the moment. Anecdotals on here reenforcing the weakening that I am seeing in the real economy. The exception is our local property market (North Yorkshire) which has just gone even more balmy…an agent has just told me 11 of the last 12 sales went over asking and within days. Even the agent says it doesn’t feel right….one last push up maybe?

Real contrast for me in terms in sentiment….sometimes bullish other times very bearish.  Making me sit in my hands  

For example, Silver to me just looks good value and out of vogue v gold (although I like gold too). I am not overly adventurous particularly with miners, so want to stick to decent size and FTSE listed if possible.

Fresnillo has now hit my first ladder….now, as ever, the doubt starts and just seeing how that ladder compares to other opportunities on my watch list. Not just silver. 

I know @sancho panzahas done sone great analysis and Fres scores ‘fine’ so tempted. 

Definitely feeling more cautious at the moment…seems whatever I buy has a tendency to ‘be too early’. I guess I will hover over the button a while 🤦🏻‍♂️

[Ash4781b]

4 hours ago, Axeman123 said:

 I really think we see inertia until a new leader is announced at party conference in early October, unless leadership candidates pull out to enable a coronation before the end of next week! That later possibility isn't impossible, but the membership won't like it one bit.

I would expect the previously announced windfall tax to quietly fizzle, as a new PM may well have a new chancellor with a different policy. BJ's 50 year mortgages will presumably go the same way. Tearing down Pishy's reputation as chancellor is the obvious campaign strategy, and the current chancellor is one of the contenders!

I think it will be too late by then.  Germany, France are clearly planning for the energy situation. Presumably being done in the U.K. All in secret I expect  so don’t know what will close what will be prioritised for energy needs. Presumably industrial production , medical, of course the  bbc , roads? 

[JMD]

1 hour ago, DoINeedOne said:

Thanks for sharing that, just finished it great discussion worth watching the beginning too some interesting charts

I did enjoy their non-pc jibe '...we are all coolies now!!' - meant in order to critique the mentality of last cycle commentators who were totally relaxed about creating a sandwich/coffee making jobs culture, and thinking that those jobs and industries were somehow equivalent to steel making and other trades.   

Also Interesting was their conjecture over this winter's COVID/Energy lockdowns, take your pick!

The Pizza (oven?!) Portfolio, I thought was kinda weirdly lifting some of the themes directly from this thread... South America, Asian debt (Chinese bonds), Switzerland, energy. However I couldn't understand what the 'second slice' was all about, was it something to do with money markets? 

[ThoughtCriminal]

Bank runs in China now.

 

 

[Spiney Norman]

35 minutes ago, Pip321 said:

Fresnillo has now hit my first ladder…

Got my eye on Fres as well, I missed it at around this price earlier in the year. I'm going to keep watching for few days see if I can get it a little cheaper.

[HousePriceMania]

1 hour ago, ThoughtCriminal said:

Bank runs in China now.

 

 

Problem solved

 

https://edition.cnn.com/2022/07/10/china/china-henan-bank-depositors-protest-mic-intl-hnk/index.html

 

China crushes mass protest by bank depositors demanding their life savings back

[ILikeCake]

1 hour ago, Spiney Norman said:

Got my eye on Fres as well, I missed it at around this price earlier in the year. I'm going to keep watching for few days see if I can get it a little cheaper.

Expect to to drop quite a bit.  I bought some along with some HOC today.

[Pip321]

26 minutes ago, ILikeCake said:

Expect to to drop quite a bit.  I bought some along with some HOC today.

I noticed HOC too....they were being discussed only last month and they were 110p then and now they are 81p.

Tempted....but they are a small business so maybe just a small purchase.

Like yourself I have absolute confidence should I buy they will dip irrationally and totally out of character. I pride myself on having that ability 

[Spiney Norman]

16 minutes ago, Pip321 said:

Like yourself I have absolute confidence should I buy they will dip irrationally and totally out of character. I pride myself on having that ability

You should buy tomorrow crash the share price for me, and i'll load up later in the week.

Thanks.