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

[WICAO]

26 minutes ago, marceau said:

The only record I know of with any detail is contained in 'When Money Dies'. What becomes clear from that is that there is more to consider under these circumstances than simple economics. You can play the numbers exactly right and still come a cropper because of politics.

I say this over and over - the result of Weimar was that pretty much everybody got fucked eventually. The laws and economic rules changed rapidly when people started starving, and even once the situation stabilised, they kept changing for decades afterwards. Not many of the ever-so-clever profiteers came out of the following 30 years unscathed, but then, neither did most of those who did nothing wrong. Your best 'protection' would have been to leave early and not come back.

It's one of the reasons I spread my wealth around the world.  Sure I then never back the winners but at the same time I also don't back the losers.  I only lose it all if the whole world goes down...

[Lightly Toasted]

52 minutes ago, DurhamBorn said:

One share buys 4.5 loaves of Lidl seeded bread.One would buy 4.5 loaves of Lidl seeded bread.Assets have little to fear from a new currency apart from the demand destruction as cash savings are destroyed.You can have a new currency though without changing it.We are getting one now in the UK its called sterling its worth half as much as the last one that was called sterling.The value of it is two sides.How many there are,how many does someone want to sell you an asset,service,goods or commodity.

In full-on hyperinflation, the utility/viability of monetary transactions (such as receiving and spending BP dividends plus all of BP's internal/external transactions) becomes moot. Business activity would collapse without an alternative token -- c.f. dollarisation.

Perhaps the state keeps printing what's needed to meet its obligations on paper, while the real economy adopts some hard currency/token. Would be a tax nightmare, but if tax inspectors are paid with state money (and how could they not be?) they'll be too busy rushing around the shops with wheelbarrows to get in anyone's way 

In the past, emerging states have partitioned their money into hard/soft versions as a matter of policy:

https://en.wikipedia.org/wiki/Foreign_exchange_certificate

 

[marceau]

15 minutes ago, Starsend said:

I've got that book as a pdf, must get around to reading it properly.

Completely agree with what you say,  everybody loses to some extent when it goes tits up completely. If it gets that bad then it's pretty clear that the only thing that will retain its value AND perhaps even more importantly, you can prevent the theft of (either directly or indirectly), is physical gold and silver.

At the moment the juries out, we all suspect it could go that way but we hope it doesn't. If I get to the point where I have a very high conviction that it is going Weimar then I will sell everything and convert into physical metals and non-perishable goods. Until that point it's just trying to keep up with high inflation for year after year most likely.

Those who played the gold and silver game during weimar just painted a giant target on their backs. It's more of a liability if you don't have the muscle or connections to protect it. If you're eating while everyone else is starving expect to be public enemy #1.

 

[JMD]

3 hours ago, Yadda yadda yadda said:

How can the public think that not doing something has pushed prices up? I could see that if the narrative was peak oil (and gas ) but it isn't.

I'm sure they do think that but it is so dumb.

Yes agreed, very dumb. I think academics would say the cause is linear thinking vs critical thinking...           But in terms of pure manipulation, it's down to 14 years of (dumbing-down) state schooling and the previous 30 years of (increasingly dumb and  degenerate) BBC propaganda!

[DoINeedOne]

interesting chat 

 

 

[Majorpain]

https://www.theguardian.com/business/2022/aug/25/big-energy-firms-refuse-to-supply-small-uk-businesses-bankruptcy-fears-contracts

This is new, those evil energy companies are refusing to quote for some small businesses because they don't think they will get paid come winter!  Pubs and beauty salons not essential expenditure for consumers it seems.

Quote

Gemma Holt, the owner of Lily’s beauty salon in Whitchurch, Shropshire, said she had found it almost impossible to renew her energy contract.

“We thought we had found a new energy supplier, but the first one we tried wouldn’t take us on because we are a hair and beauty business, and because of the energy usage, with the washing machine and tumble dryer going all the time.”

 

[Starsend]

8 minutes ago, marceau said:

Those who played the gold and silver game during weimar just painted a giant target on their backs. It's more of a liability if you don't have the muscle or connections to protect it. If you're eating while everyone else is starving expect to be public enemy #1.

 

You just have to be smart about it. You bury your precious metals in the woods somewhere and come back and get it twenty years later when it's safe to do so. In the meantime you muddle through same as everybody else, maybe using the odd silver coin to keep the wolf from the door if it's safe to do so and isn't going to draw attention.

[DurhamBorn]

32 minutes ago, WICAO said:

The poor management of the UK is literally causing the inflation.  The question then becomes at what point will the Politicians and BoE wake up.

When they dont have inflation linked pensions i suspect.

[Yadda yadda yadda]

5 minutes ago, marceau said:

Those who played the gold and silver game during weimar and just painted a giant target on their backs. It's more of a liability if you don't have the muscle or connections to protect it. If you're eating while everyone else is starving expect to be public enemy #1.

 

Yes. Keeping a low profile, if the worst happens, will be essential. Make sure you're seen to be struggling like everyone else. Don't buy lots of food in one shop.

I know some see gold and silver being used as day-to-day currency. I believe this happens in Venezuela. I think you will be able to exchange for cash but it would take a complete collapse where violence ruled for it to take that role here.

I wouldn't fancy being a foreigner anywhere. Either you're a rich target or you're taking their resources. Unless you're very well embedded it isn't a good position.

[Noallegiance]

55 minutes ago, WICAO said:

 

- The French complaining about UK turds reaching the French coast in excessive quantities

It's the new global barter exchange. They send us turds, so......

[marceau]

1 minute ago, Starsend said:

You just have to be smart about it. You bury your precious metals in the woods somewhere and come back and get it twenty years later when it's safe to do so. In the meantime you muddle through same as everybody else, maybe using the odd silver coin to keep the wolf from the door if it's safe to do so and isn't going to draw attention.

If you can guarantee 20 years is enough, then sure. Of course, every ancient coin hoard that's been dug up across the world once had an owner who thought the same thing.

[HousePriceMania]

34 minutes ago, afly said:

They're not asleep. They are retards

Or....they are clever ****ers who've been on top of the pile for 1000 years and say an opportunity to take everything back from the people that the people fought and won under "real" labour governments

 

[humdrum]

We are doomed I tell you, doomed.

Things will get worse and worse until they finally start to get better when we will stop taking notice because we rather enjoy being glum.

[Starsend]

3 minutes ago, marceau said:

If you can guarantee 20 years is enough, then sure. Of course, every ancient coin hoard that's been dug up across the world once had an owner who thought the same thing.

Most of them probably never told anybody where it was and then got killed / had a heart attack. You'd need to have somebody you could trust, which would be difficult for some. I have children I trust so I'd be ok.

[Lightly Toasted]

7 minutes ago, Majorpain said:

https://www.theguardian.com/business/2022/aug/25/big-energy-firms-refuse-to-supply-small-uk-businesses-bankruptcy-fears-contracts

This is new, those evil energy companies are refusing to quote for some small businesses because they don't think they will get paid come winter!  Pubs and beauty salons not essential expenditure for consumers it seems.

 

They can still get energy, just not on a fixed price contract.

If they cannot find a fixed-rate contract, they move on to an out-of-contract “deemed” rate, which is uncapped and can soar in line with market prices.

Mark Dickinson, the chief executive of energy broker Inspired, said some energy firms were only choosing to renew contracts with customers they already had, “so they’re withdrawing from new business. [Others are] effectively saying they don’t even want to renew current customers.”

In the current climate it makes sense for energy suppliers to avoid fixed price supply contracts lasting several years -- the supplier's business is on the line too, and I imagine hedging costs are through the roof and will be exposed to counterparty risk.

 

[Harley]

3 hours ago, sancho panza said:

The govt needed 60% of the adult population on the debt treadmill to keep the banking system solvent and to pay for the 40% who were benefit recipients/pensioners/public sector .

Then the problem becomes how do you run it when it becoems 50/50??? How do you fund it when it becomes 40% working 60% taking?

I say that as a public sector worker.The maths is simple.You can shrink reserve requirements at banks over the decades,you can run consistent fiscal deficits but at some point the piper will want paying.

More and more of the worker bees are saying 'f*** that'.

Saw an old army mate yesterday,he was saying him and his Mrs were looking at a bigger house,did the maths,thought about all the extra work and tax and thought 'f*** that'.

The worker bees are waking up to the parasites in Westminster and not before time.

At last, I'm at the top of a list and happy.  Almost "earn nothing for nobody and be happy"!  My net zero! 

[HousePriceMania]

Inflation linked bonds anyone ?

Oh, not for the little people ?

 

https://www.zawya.com/en/markets/fixed-income/uk-gets-strong-demand-for-ultra-long-inflation-linked-bond-nifjqqv7

[DurhamBorn]

8 minutes ago, Starsend said:

You just have to be smart about it. You bury your precious metals in the woods somewhere and come back and get it twenty years later when it's safe to do so. In the meantime you muddle through same as everybody else, maybe using the odd silver coin to keep the wolf from the door if it's safe to do so and isn't going to draw attention.

Iv i ever disappear you might get lucky if you go down Smokey's Cave.Its a culvert hidden away,but right down there is a shaft leading off and it connects to one of the old drift mines around here.Its the only one i know you can still get in,not many know where the entrance is.If you notice the last few photos thats the coal seam.Amazing really.You could set up a rope and pulley system and extract a lot of coal out of there by hand and a pic axe.Only prob is the seam gets very thin in places and you need 11 year olds to squeeze in those bits,like they used to.

https://www.28dayslater.co.uk/threads/boxed-in-smokies-cave-bishop-auckland-august-2016.104933/

[Starsend]

2 minutes ago, humdrum said:

We are doomed I tell you, doomed.

Things will get worse and worse until they finally start to get better when we will stop taking notice because we rather enjoy being glum.

I wish I lived in more sane times when adults were in charge, hard work was rewarded and the girlies were slim. Nobody enjoys trying to navigate this mess surely.

[RJT1979]

Tesla. Oops share spilt

[Starsend]

3 minutes ago, DurhamBorn said:

Iv i ever disappear you might get lucky if you go down Smokey's Cave.Its a culvert hidden away,but right down there is a shaft leading off and it connects to one of the old drift mines around here.Its the only one i know you can still get in,not many know where the entrance is.If you notice the last few photos thats the coal seam.Amazing really.You could set up a rope and pulley system and extract a lot of coal out of there by hand and a pic axe.Only prob is the seam gets very thin in places and you need 11 year olds to squeeze in those bits,like they used to.

https://www.28dayslater.co.uk/threads/boxed-in-smokies-cave-bishop-auckland-august-2016.104933/

Interesting website that, some great photo's.

Have to say I'd be bloody tempted to dig some of my own coal if it's that accessible near you. Filthy work but if it gets bad enough this Winter...

[spygirl]

3 hours ago, sancho panza said:

The govt needed 60% of the adult population on the debt treadmill to keep the banking system solvent and to pay for the 40% who were benefit recipients/pensioners/public sector .

Then the problem becomes how do you run it when it becoems 50/50??? How do you fund it when it becomes 40% working 60% taking?

I say that as a public sector worker.The maths is simple.You can shrink reserve requirements at banks over the decades,you can run consistent fiscal deficits but at some point the piper will want paying.

More and more of the worker bees are saying 'f*** that'.

Saw an old army mate yesterday,he was saying him and his Mrs were looking at a bigger house,did the maths,thought about all the extra work and tax and thought 'f*** that'.

The worker bees are waking up to the parasites in Westminster and not before time.

UK can only support ~10% of workforce in public sector and 10% of working age households on benefits.

50% of the bennies household need taking out.

 

[Majorpain]

12 minutes ago, Lightly Toasted said:

They can still get energy, just not on a fixed price contract.

If they cannot find a fixed-rate contract, they move on to an out-of-contract “deemed” rate, which is uncapped and can soar in line with market prices.

Mark Dickinson, the chief executive of energy broker Inspired, said some energy firms were only choosing to renew contracts with customers they already had, “so they’re withdrawing from new business. [Others are] effectively saying they don’t even want to renew current customers.”

In the current climate it makes sense for energy suppliers to avoid fixed price supply contracts lasting several years -- the supplier's business is on the line too, and I imagine hedging costs are through the roof and will be exposed to counterparty risk.

Yes, if they think you can actually pay, when the fixed deal ends you automatically go onto their pay as you go market rate supply.  However, some of the businesses are such a lost cause that the suppliers don't actually want to deal with them at all, when none of the energy companies want to supply you what are you going to do?  This is proper uncharted waters territory.

[DurhamBorn]

9 minutes ago, marceau said:

If you can guarantee 20 years is enough, then sure. Of course, every ancient coin hoard that's been dug up across the world once had an owner who thought the same thing.

Its where the word bank came from.Soldiers etc used to stick their money "in the bank" actually a hedge/bank near a certain tree or feature and collect later,as you say for many there was no later.I used to do a lot of detecting back in the day.

Vikings used to hide theirs away though on purpose they thought it went with them into the afterlife.Roman coins etc on nearly every field near me Dere Street ran straight through here.

My best finds were always where people would sit though,corners of small streams,big trees in field boundaries etc,you get coin spills there.

[spygirl]

28 minutes ago, Majorpain said:

https://www.theguardian.com/business/2022/aug/25/big-energy-firms-refuse-to-supply-small-uk-businesses-bankruptcy-fears-contracts

This is new, those evil energy companies are refusing to quote for some small businesses because they don't think they will get paid come winter!  Pubs and beauty salons not essential expenditure for consumers it seems.

 

So ... the great UK employment miracle- see various threads here, on TCs, UCs, based on hordes of single mums working PT in hair n nail salons, inc EU migrants in pizza n burger eateries, with huge tax payer subs, is about to blow up.

Good.