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

[JMD]

5 hours ago, jamtomorrow said:

Interesting idea. The start of the divergence certainly coincides with when robotics began to take hold in auto production.

Correlation is not causation of course, but that merely puts the automation hypothesis on an equal footing with the alternatives. And the simultaneous spike in labour costs due to wage inflation would certainly have tilted the incentives.

So maybe "perfect storm" for substitution of labour by capital?

Yes, I think the labour/capitol substitution should have been a wake up call for reform. Though perhaps in fairness perhaps reforms did happen under the guise of rampant financialisation and private enterprise reforms. However where was the monitoring happening in order to measure success or failure? - But my real criticism lies with the economists who imho appeared to willfully continue to forlornly seek out productivity (and inflation!) In the wrong places.. I think our economists and those climate scientists have a lot in common?!

[DurhamBorn]

You dont need productivity growth to get richer ,you just need to owe less debt on assets you use like a house.What government means when they say we need productivity growth is that they want the workers to fund the none workers,the state and the banks more,not themselves.

My productivity is now 100% used against the government.I fix families houses so they dont need to pay,i look after grandkids,i look after everyones portfolios to keep tax down etc etc.

[Hancock]

1 hour ago, DurhamBorn said:

You dont need productivity growth to get richer ,you just need to owe less debt on assets you use like a house.What government means when they say we need productivity growth is that they want the workers to fund the none workers,the state and the banks more,not themselves.

My productivity is now 100% used against the government.I fix families houses so they dont need to pay,i look after grandkids,i look after everyones portfolios to keep tax down etc etc.

Remember you saying something about govt regulating BTL to bring it down to a more normal level.

Anyway below is a picture of a smug, condescending jumped up parasitic wanker.

[Hancock]

3 hours ago, ThoughtCriminal said:

This is the second time in a week he's floated the idea of selling a big wedge. 

 

He clearly wants to get it done without looking like the bad guy 

He knows if he sells 10%, he then has the cash to buy back the entire company for himself when its share price crashes.

If i was him, id be looking to flog 10% of what he owns, and doing some good in America with it, like building homes for his workers etc...

[wherebee]

11 hours ago, janch said:

H e r m e s becomes Herpes somehow and can't be amended??

 

11 hours ago, janch said:

Are we missing a trick?  Since it's the 0.01% who benefit disproportionately from the money-printing to the plebs (deplorables) ie us, maybe we should try to get a few crumbs from their table by investing in the shares of the posh companies eg LVMH/Dior/Herpes etc. 

https://finance.yahoo.com/news/luxury-stocks-rise-as-lvmh-results-signal-strong-demand-090520821.html

Thoughts?

those brand companies do not make their big prfits off the 1%.  They make them from millions of middle class wannabees and chinese projectors buying overpriced shit en masse.

I suspect that market is dead, if the globalists get what they want.

[spygirl]

8 hours ago, DurhamBorn said:

You dont need productivity growth to get richer ,you just need to owe less debt on assets you use like a house.What government means when they say we need productivity growth is that they want the workers to fund the none workers,the state and the banks more,not themselves.

My productivity is now 100% used against the government.I fix families houses so they dont need to pay,i look after grandkids,i look after everyones portfolios to keep tax down etc etc.

You could also try getting the dossers off benefits too.

 

[spygirl]

10 hours ago, ThoughtCriminal said:

This is the second time in a week he's floated the idea of selling a big wedge. 

 

He clearly wants to get it done without looking like the bad guy 

Not really.

The US Dems have acquired a large vocal minitority who thing the solution to everything is more tax on rich people.

And taxes on Jeff and Elons un realised capital gains.

 

 

[ThoughtCriminal]

10 minutes ago, spygirl said:

Not really.

The US Dems have acquired a large vocal minitority who thing the solution to everything is more tax on rich people.

And taxes on Jeff and Elons un realised capital gains.

 

 

I know, thats what im referring to. 

 

He's motivated by taxation plans, but the method he's chosen (twitter poll) is his cover for when he tanks the share price. 

 

Musks brother just sold 108 million dollars worth of shares too. 

[ONC]

Interesting bit in the Times this morning mentioned the strike at John Deere USA.

A new pay offer includes a QUARTERLY cost of living adjustment (cola). I am 48, and have never heard of this before, never mind on a quarterly basis! Are things changing?

some more details here 

https://eu.desmoinesregister.com/story/money/business/2021/11/01/how-john-deere-new-offer-union-striking-uaw-would-change-pay-benefits-iowa-strike/6227787001/

[Balding Badger]

I haven't posted on this thread before but have followed it for months (it was the reason I discovered Dosbods in the first place) before taking a break from the site. Being back to following it again now I still find it all confusing.

Have we now decided that there will be no deflation and the inflation that is happening now is the start of a major trend?

It matters to me because I am not any sort of investor/trader but I do have savings in cash and don't fancy losing the value rapidly. I own the biggest house I am ever likely to own now and have no mortgage so there is no need to keep cash towards trading up any more and no debt to pay off. That means I need to decide what to do for my long term security. I run a business so prefer to keep what is mine 'safe' in case business were to ever go wrong. I'm 50, if that makes any difference. 

I would appreciate any helpful thoughts. Sorry if this is the wrong place for this but I suspect the quality of advice here is far better than any I could pay for!

[Noallegiance]

Therapy time.

Why the fuck am I the only one with shitty old cars renting a damp bungalow having seemingly played the wrong financial game for a decade?

Short on patience today. Fucks me off.

[Loki]

1 minute ago, Noallegiance said:

Therapy time.

Why the fuck am I the only one with shitty old cars renting a damp bungalow having seemingly played the wrong financial game for a decade?

Short on patience today. Fucks me off.

Look around you - soon mate, soon!

[Loki]

14 hours ago, ThoughtCriminal said:

He's fucking daring me to short Tesla the twat 🧐

As of now it's

Yes 56.9%

No 43.1%

[Loki]

Quote

 

❌  COAL: SOLD OUT!

Not really what you’d expect from a resource that’s supposedly on the way out, is it?

"It’s pretty much sold out," Peabody Chief Executive Officer Jim Grech said Thursday during a conference call. "We only have a small portion left to be sold for 2022 and for 2023."

Arch's thermal coal output for 2022 is “fully committed,” CEO Paul Lang said Tuesday, with an average price for Powder River Basin output of $16 a ton. That’s well above the $13.25 spot price last week, according to S&P Global Market Intelligence. Only a small amount of export tons remains to be sold for the second half of next year. While the company is transitioning to focus on coal for making steel, its thermal mines are helping boost cash flow and the company reinstated the dividend that was suspended last year.

Alliance Resource Partners LP, a coal miner that’s on track to ship about 32 million tons this year, has already locked in deals for 30 million tons next year and almost 16 million tons in 2023.

"Our challenge in America is most producers are all sold out," CEO Joe Craft said during a call Monday.

It bears repeating what we said before in these missives:

The prevailing wisdom is that coal is in an existential decline, but you know what? The prevailing wisdom is not wise at all. It is, in fact, as wrong as Miley Cyrus swinging naked on a wrecking ball. Just wrong.

An argument could be made that the long-term demand for coal will decline over the next 20+ years or so, but we believe that near/medium term supply destruction will be far more dramatic than any decline in demand. This is going to be a decade for coal.

 

Capitalist Exploits newsletter

[ThoughtCriminal]

5 minutes ago, Loki said:

As of now it's

Yes 56.9%

No 43.1%

Well from my reading of FinTwitter this morning, it looks like everyone is buying puts like madmen. 

 

Tomorrow is going to be interesting. 

[Loki]

Just now, ThoughtCriminal said:

Well from my reading of FinTwitter this morning, it looks like everyone is buying puts like madmen. 

 

Tomorrow is going to be interesting. 

Is that just a general selection of tweets or do you mean specific channels?

[ThoughtCriminal]

3 minutes ago, Loki said:

Is that just a general selection of tweets or do you mean specific channels?

Both really. 

 

Ive been skipping across threads all morning seeing what the consensus is. 

 

The "gurus" think musk is playing 4D chess, the masses think he'll follow through and tank the stock. 

 

If the talk translates to action then it's circus time. 

[Bobthebuilder]

20 minutes ago, Balding Badger said:

It matters to me because I am not any sort of investor/trader but I do have savings in cash and don't fancy losing the value rapidly. I own the biggest house I am ever likely to own now and have no mortgage so there is no need to keep cash towards trading up any more and no debt to pay off. That means I need to decide what to do for my long term security. I run a business so prefer to keep what is mine 'safe' in case business were to ever go wrong. I'm 50, if that makes any difference. 

Being 50 and I presume self-employed, a SIPP might be a good place to start. The tax relief is a big bonus to start with, but you need to check your access age etc, to see if it's good for you. DYOR and all that.

I plan to stuff every penny I can into my SIPP then start drawing it from 55/57, 25% tax-free lump sum, then tax allowance every year after.

Being mortgage free is a great place to be going forward, maybe have a look at what needs to be done, windows, doors, etc. Future-proof it now. Really glad I had most of the work done on mine that was needed last year, price rises from then have already saved me quite a bit of dosh.

Welcome and good luck.

[Sugarlips]

Probably nothing..

 

[BurntBread]

I don't know if we have had this posted...

According to a report this week, 140 million Chinese have wallets for the new central bank digital Yuan, and have already spent the equivalent of nearly ten billion US dollars with the 1.5 million merchants who can accept these payments. The People's Bank of China has concerns about the security of the system against fraud, though.

China is a big country, so maybe this could be seen as a small trial. However, it looks to me like they are long way down the route of making it work at scale.

I'm guessing the West will wait and see how much of a disaster it is before pushing ahead in earnest here. I don't mean they will stop if it's a disaster in China, but just in order to plan the messaging properly. I think I'm going to start paying with cash at the supermarket check-outs, to send the message that there are still a lot of us luddite reprobates out there.

[Noallegiance]

On 06/11/2021 at 14:10, DurhamBorn said:

Yes its scattergun firing off sectors to the twitter mob,at Fidelity the equity team would decide if to add an airline or two to the portfolio.I think he is maybe picking off sectors he expects to run up ahead of a bust.I think Kaplan is far better at spotting the sectors getting close to a longer term turn rather than spikes.

Dave did work for the best team though and of course an amaing boss,Peter Lynch,the best contrarian value investor of all time for me.

 

[working woman]

14 hours ago, wherebee said:

Big brand companies do not make their big profits off the 1%.  They make them from millions of middle class wannabees and chinese projectors buying overpriced shit en masse.
I suspect that market is dead, if the globalists get what they want.

I think a lot of them make their money from their perfumes and aftershaves - a more affordable way for us lesser mortals to buy a "luxury" item than a couture dress. 

 

4 hours ago, Balding Badger said:

I need to decide what to do for my long term security.

I turned 55 last month so the same thoughts have been on my mind for the last few years.

Some ideas (not advice)

Keep paying National Insurance to accumulate years for the State Pension. I think I needed 35. I am not banking on it, but it would be a bonus.

It is great to be mortgage free, it makes your out goings really low. (apart from the flippin' Council Tax.)

You can use the capital in your home in the future, release it with Equity Release - you need to look into it carefully. I think some people found their interest accumulated into a large sum and when their children came to sell, there wasn't much equity left. Other schemes may be less unscrupulous.

Downsize again to a retirement property for your 70's and 80's, they are cheaper than ordinary flats. Watch the costs of the service charges. 1 bed is cheaper, 2 bed is quite expensive. My Mum lived in one with a warden and I have decided when the time comes I want to be in one so with the warden, there is always someone there. We managed to sell my Mum's flat fairly easily after she died, despite it being the 2009/2010 credit crunch. 

Small Pension Pots Rule. I think you can totally cash in small private pension pots upto 10K and you can do three of these in a lifetime.   I'm planning to cash my small pots in a staggered way say every 5 years and just spending them.

Keep saving for your  70's and 80's.

If you have children, and want them to inherit your home, maybe look at putting it into a trust (my inlaws have done that) so the council won't make them pay for it if they need care. Needs to be done well in advance.

Learn about frugal living, some ideas - I find food is the one area that gets out of control for me and can be expensive, ways to cut costs - learn to cook, eat mainly Vegetarian, grow your own food, keep a nice meal in the freezer for times when you can't be bothered to cook (my downfall/ naughty habit is to go out to eat.) Clothes off of ebay or charity shops, Holidays - get a tent. 

Gratitude, look around you and what you have and be grateful, it lessens the desire to consume more and better.

Read this thread. Another interesting site is early retirement extreme, which has links to other sites.

[working woman]

3 hours ago, BurntBread said:

 

According to a report this week, 140 million Chinese have wallets for the new central bank digital Yuan,

I am really not looking forward to this if we adopt this idea. I take it, it works via a mobile phone?

I am useless with mobile phones, often forget to charge it and it runs flat, mine is currently broken as the on/off button doesn't work, needs to go back to Tesco's HO. What happens if we get a power cut and can't charge it?

I like my debit card and cash, why do they have to meddle with things. Parking meters - quick and easy with cash, a flippin palava to ring up and pay for a ticket.  

[spygirl]

24 minutes ago, working woman said:

I think a lot of them make their money from their perfumes and aftershaves - a more affordable way for us lesser mortals to buy a "luxury" item than a couture dress. 

 

I turned 55 last month so the same thoughts have been on my mind for the last few years.

Some ideas (not advice)

Keep paying National Insurance to accumulate years for the State Pension. I think I needed 35. I am not banking on it, but it would be a bonus.

It is great to be mortgage free, it makes your out goings really low. (apart from the flippin' Council Tax.)

You can use the capital in your home in the future, release it with Equity Release - you need to look into it carefully. I think some people found their interest accumulated into a large sum and when their children came to sell, there wasn't much equity left. Other schemes may be less unscrupulous.

Downsize again to a retirement property for your 70's and 80's, they are cheaper than ordinary flats. Watch the costs of the service charges. 1 bed is cheaper, 2 bed is quite expensive. My Mum lived in one with a warden and I have decided when the time comes I want to be in one so with the warden, there is always someone there. We managed to sell my Mum's flat fairly easily after she died, despite it being the 2009/2010 credit crunch. 

Small Pension Pots Rule. I think you can totally cash in small private pension pots upto 10K and you can do three of these in a lifetime.   I'm planning to cash my small pots in a staggered way say every 5 years and just spending them.

Keep saving for your  70's and 80's.

If you have children, and want them to inherit your home, maybe look at putting it into a trust (my inlaws have done that) so the council won't make them pay for it if they need care. Needs to be done well in advance.

Learn about frugal living, some ideas - I find food is the one area that gets out of control for me and can be expensive, ways to cut costs - learn to cook, eat mainly Vegetarian, grow your own food, keep a nice meal in the freezer for times when you can't be bothered to cook (my downfall/ naughty habit is to go out to eat.) Clothes off of ebay or charity shops, Holidays - get a tent. 

Gratitude, look around you and what you have and be grateful, it lessens the desire to consume more and better.

Read this thread. Another interesting site is early retirement extreme, which has links to other sites.

My one bit if retirement advice - the first 15 years of retirement are the most expensive - assuming you dont go into care.

After 80, most peoples ability to splurge slows down.

 

[BurntBread]

14 minutes ago, working woman said:

I am really not looking forward to this if we adopt this idea. I take it, it works via a mobile phone?

I am useless with mobile phones, often forget to charge it and it runs flat, mine is currently broken as the on/off button doesn't work, needs to go back to Tesco's HO. What happens if we get a power cut and can't charge it?

I like my debit card and cash, why do they have to meddle with things. Parking meters - quick and easy with cash, a flippin palava to ring up and pay for a ticket.  

Yes, it's going to be a more fragile system that what we have now, and will tie you into other aspects of technology. Digital payments (debit/credit/contactless) are obviously more convenient for store-holders than handling and counting cash, but CBDC's don't seem to add any efficiency to the economy over those systems we already have.

I genuinely cannot see any point to it, other than putting all our transaction history into government hands, and at the same time giving the government the ability to have complete financial control over us. Those are nefarious reasons, and are just piling up the dry brushwood as fuel for a totalitarian regime. I would have thought that even if we hadn't been through 2020/1 and seen how ravenous the authorities are to consume our freedoms; but how people now are not screaming "murder" at the very mention of CBDC by the bank of England is beyond me.

Even from a macro-economic point of view, as professor Werner has pointed out, forcing everyone to have their bank account at the central bank is the old Soviet system. Retail banks have done a pretty rubbish job of allocating capital productively in the West these last couple of decades, but the idea that the government will somehow do it better does not stand the test of history.

I am guessing this can be seen as another of DB's "economics drives politics" things: the central banks need to get infrastructure projects going, and so need to take control of larger and larger parts of the economy, in order to drive the reflation. However, they do have the tools to do this without burning down the remaining bits and pieces of liberal democracy. Liberal capitalism in the West is going through one of its periodic sicknesses. This time though, they seem hell bent on applying a treatment which will kill the patient: not this year or next, but probably this decade, as DB and David Hunter keep reminding us.