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

[HousePriceMania]

Agree for A or Laugh for B ( though that seems wrong somehow ) and Vomit for dont care

[reformed nice guy]

1 hour ago, GTM said:

It really is difficult to call this. We've managed to stash a little bit of money offshore. I have recently added a little more physical gold, all sadly lost in an unfortunate boating accident. But buying lots of PMs with the £ at $1.20ish is either a stroke of genius or the mark of a lunatic.

Gold performance in most currencies averages about 8.5% per annum over 15 years according to this table so with 10% inflation I dont think its a bad allocation.

 

[Axeman123]

3 minutes ago, HousePriceMania said:

Agree for A or Laugh for B ( though that seems wrong somehow ) and Vomit for dont care

B going to the wall gets politicians strung up from lamp-posts, whereas A doesn't.

I have come around to the view that the callous way houses were pumped to fight deflation will be mirrored in the callous way housing equity will be sacrificed to fight inflation. The BoE never had property-rampers backs, it just saw them as useful idiots.

[Formerly]

15 minutes ago, desertorchid said:

More fiddling.

Capped at 6.3%

https://www.openaccessgovernment.org/student-loan-interest-rates/141380/

It'll make no difference to most as they'll never pay them off. Instead they'll be burdened with another 9% on their tax rates for their working life.

[Noallegiance]

[Bus Stop Boxer]

11 hours ago, King Penda said:

The only good news that I can think

of is that a shag will be even easier to get if you’ve got a job a car and a house but even this is loosing its lustre 

Chickens? Air Rifle? Wood burner?

[HousePriceMania]

U.S. inflation solved

 

 

 

 

This wont end well.

[Starsend]

57 minutes ago, Noallegiance said:

Random conversation with a football dad last weekend. He has a few rentals and bought a couple more last year for £300k+.

I played ignorant.

I'll have a front row seat to one obvious case. Expecting many more to come out of the woodwork in my circles of acquaintances.

It'll be bitter-sweet to witness.

Mostly sweet 

[Starsend]

50 minutes ago, reformed nice guy said:

Gold performance in most currencies averages about 8.5% per annum over 15 years according to this table so with 10% inflation I dont think its a bad allocation.

 

I've held physical gold for prob about that long and I'm very happy with the performance. I spent a bit of time working out that it had probably roughly tracked real inflation rather than made up Government bullshit. That's all I really expect and want it to do. If it does go into a bubble one day then great but I'd have to sell then.

 

[Starsend]

1 hour ago, Noallegiance said:

Random conversation with a football dad last weekend. He has a few rentals and bought a couple more last year for £300k+.

I played ignorant.

I'll have a front row seat to one obvious case. Expecting many more to come out of the woodwork in my circles of acquaintances.

It'll be bitter-sweet to witness.

It's when you see the extent of BTL + add on to that the astonishing over-valuations of house prices that you get a glimpse of the possible size of a real HPC - it would be so epic that it could bring down everything including the banking system.

It makes you wonder how far they'll go with fighting inflation or whether they'll risk hyper-inflation as they think a crash would be too devastating. They've boxed themselves into an incredible position and are trying to walk a tightrope in-between at the moment. It's going to be really interesting seeing how this all pans out.

[JREWING]

Fuck me sideways with a ripe banana..

https://www.bbc.co.uk/news/live/business-62566828

Meanwhile, average wage increases are falling behind, with the average salary buying 3% fewer goods and services than a year before

PhD student Rebecca Brown says rising prices mean she can’t afford things she once saw as essential.

She says: "After rent and bills plus my bus fare, phone, Netflix and Spotify bills, that leaves me around £300 to £400 a month for food, fun and necessities.

"I buy basics wherever I can and cook in bulk.

"Last winter we tried to be very frugal with the heating - bundling up with dressing gowns and blankets. But that didn't stop our bills going up from £80 to £140 somehow.

[Jay]

3 hours ago, Harley said:

Upgraded to excellent after listening to it all.  What I was taught back in the day, plus further study.  A superbly structured walk through.  Refreshing to hear and get centered again after all the BS.  God knows what shiteshow it is in academia now.  Lovely voice!  Hope they cover off the Austrians (and Mises' related PPE stuff) at some point.

Absolutely agree it is excellent. Thanks for posting it…a good book on 1920s is Lords of Finance by Liaquait Ali…compares approaches by uk us France and Italy…also good to be reminded how well Britain was doing in the 30s..

They say that war is inflationary and the last twenty years of war is possible due to printing…I do remember that the taxation and government spending financed the Great War…seem to imply that inflation will continue as we continue with Ukraine and also Covid policy was a war strategy unless I misunderstood which is probable..

Always good to hear the other side ..I still believe that deflation and war are needed/will occur..will get the benefit cuts then…after stagflation…a tad pessimistic..

you emerging markets investors are ahead of the curve imo but demonstrate ability and talent which means that there still hope..

we live in interesting times..be lucky..

[Starsend]

5 minutes ago, JREWING said:

Fuck me sideways with a ripe banana..

https://www.bbc.co.uk/news/live/business-62566828

Meanwhile, average wage increases are falling behind, with the average salary buying 3% fewer goods and services than a year before

PhD student Rebecca Brown says rising prices mean she can’t afford things she once saw as essential.

She says: "After rent and bills plus my bus fare, phone, Netflix and Spotify bills, that leaves me around £300 to £400 a month for food, fun and necessities.

"I buy basics wherever I can and cook in bulk.

"Last winter we tried to be very frugal with the heating - bundling up with dressing gowns and blankets. But that didn't stop our bills going up from £80 to £140 somehow.

"with the average salary buying 3% fewer goods and services than a year before"

 

MY FUCKING ARSE

 

[Yadda yadda yadda]

5 minutes ago, JREWING said:

Fuck me sideways with a ripe banana..

https://www.bbc.co.uk/news/live/business-62566828

Meanwhile, average wage increases are falling behind, with the average salary buying 3% fewer goods and services than a year before

PhD student Rebecca Brown says rising prices mean she can’t afford things she once saw as essential.

She says: "After rent and bills plus my bus fare, phone, Netflix and Spotify bills, that leaves me around £300 to £400 a month for food, fun and necessities.

"I buy basics wherever I can and cook in bulk.

"Last winter we tried to be very frugal with the heating - bundling up with dressing gowns and blankets. But that didn't stop our bills going up from £80 to £140 somehow.

3%, how have they worked that out? Are they including people on bennies? >10% inflation with wages, on the generous measure including bonuses, going up <5%.

Netflix and Spotify cost very little. Perhaps the equivalent of 3 pints per month combined. Although you can make do with free Spotify, like I do, if you can hear the adverts. The phone might be expensive but that is an area where they can make a cut by switching to sim only when the contract ends.

£140 per month is lower than the average utilities bill, currently.

[Jay]

2 hours ago, GTM said:

It really is difficult to call this. We've managed to stash a little bit of money offshore. I have recently added a little more physical gold, all sadly lost in an unfortunate boating accident. But buying lots of PMs with the £ at $1.20ish is either a stroke of genius or the mark of a lunatic.

Very good insurance policy physical gold…didn’t Robert maxwell also have an boating accident..seem to be getting more common..be lucky…

[HousePriceMania]

2 hours ago, feed said:

There will be 10 of thousands of hours of recordings of Truss in meetings. Along with all other senior politicians. 
They will all have been scrutinised to find anything; a slip of the tongue, an out of context comment, a misheard reply.  
Anything for this kind of headline.  
The question is who leaked it and why? That Truss is being attacked this hard, is interesting.  

But still, a Truss government either delivers changes inline the change in the cycle from disinflationary to inflationary.  Reducing government spending and reducing taxes or they deliver a currency collapse.  Everything else is noise. 

That people still get hung up on individual politicians or guardian headlines, in a macro thread, really surprises me. 
 

The establishment want Sunak, so could be anyone.

To be fair though, most old skool tory voters would agree with her, so she is a shoe in.

[feed]

17 minutes ago, Yadda yadda yadda said:

3%, how have they worked that out? Are they including people on bennies? >10% inflation with wages, on the generous measure including bonuses, going up <5%.

Netflix and Spotify cost very little. Perhaps the equivalent of 3 pints per month combined. Although you can make do with free Spotify, like I do, if you can hear the adverts. The phone might be expensive but that is an area where they can make a cut by switching to sim only when the contract ends.

£140 per month is lower than the average utilities bill, currently.

Wage growth is higher than you think ~6% incl. bonus.  Still behind inflation of course.   

 

 

 

[Boon]

I'd imagine wage growth is not evenly distributed.

At the bottom end there is a boost due to the min wage, but could imagine those people in jobs at the higher end where they cannot be replaced also skew it.

The lower middle class in jobs where replacements can be easily had would be the losers. And by and large, these will be the people featured in the sob stories.

[feed]

1 minute ago, Boon said:

I'd imagine wage growth is not evenly distributed.

At the bottom end there is a boost due to the min wage, but could imagine those people in jobs at the higher end where they cannot be replaced also skew it.

The lower middle class in jobs where replacements can be easily had would be the losers. And by and large, these will be the people featured in the sob stories.

no doubt

[A tremendous # on the lung]

Bit of a random question but - does anyone know where Moneyweek's John Stepek has gone to (he left Moneyweek recently)?

[Harley]

3 hours ago, Plan-b said:

Arseholes for even considering this during food inflation and shortages

So therefore......

[Yadda yadda yadda]

13 minutes ago, feed said:

Wage growth is higher than you think ~6% incl. bonus.  Still behind inflation of course.   

 

 

 

I must have seen the 5% figure for June. I did think I should check it though!

11 minutes ago, Boon said:

I'd imagine wage growth is not evenly distributed.

At the bottom end there is a boost due to the min wage, but could imagine those people in jobs at the higher end where they cannot be replaced also skew it.

The lower middle class in jobs where replacements can be easily had would be the losers. And by and large, these will be the people featured in the sob stories.

No doubt it is people on average wages who are being squeezed most.

[HousePriceMania]

22 minutes ago, feed said:

Wage growth is higher than you think ~6% incl. bonus.  Still behind inflation of course.   

 

 

 

Is that wage growth for the public sector or wage growth for the people forced to fund them ?

[M S E Refugee]

Greens offer solution to UK energy crisis https://www.rt.com/business/561006-uk-nationalization-energy-companies/

The Greens want to nationalise the Utility companies so the Government can set the price of energy.

What a great idea!

It's got me thinking, maybe I ought to phone Atkinson's Bullion and tell them that their 1oz Gold Coins are too expensive so I am going to cap the price at £250 per 1oz Gold Coin.

 

 

[feed]

2 minutes ago, HousePriceMania said:

Is that wage growth for the public sector or wage growth for the people forced to fund them ?

far as i can tell, both