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

[Sidd]

1 hour ago, nirvana said:

DXY is back above 94......all that Silver and other shiny shite is doing us no good lol 

@DurhamBorn Do you see the dollar still heading a lot higher from here or do you anticipate we will visit the 80's again before the next major run up?

[jamtomorrow]

33 minutes ago, Green Devil said:

They say inflation causes spending. Like fuck it does. Interested in buying large ticket items, car, house, campervan, boats? Have you looked at the prices recently, theyre soaring. No one is buying now, theyre waiting for the insanity to end (but will it?). 

That is a - maybe "the" -  big difference from the last time we were in this position, macro-economically.

Discretionary consumption is now a much bigger chunk of the economy, and won't necessarily behave in the same way as essentials. We'll see a crapload of demand destruction in discretionary sectors either before or alongside inflation in essentials.

[NogintheNog]

Message from the FED to Biden.

"Oil/Gas shortage might cause inflation, can you ask those nice chaps at OPEC to pump some more oil to get the price down, kind regards, the FED."

Nothing to do with all those $ you printed then????

https://twitter.com/BBCNews/status/1445118207715643393

[NogintheNog]

Power is everything......

 

[Yadda yadda yadda]

19 minutes ago, NogintheNog said:

Message from the FED to Biden.

"Oil/Gas shortage might cause inflation, can you ask those nice chaps at OPEC to pump some more oil to get the price down, kind regards, the FED."

Nothing to do with all those $ you printed then????

https://twitter.com/BBCNews/status/1445118207715643393

OPEC to Biden: "Sorry Mr Biden, we can't print oil."

[invalid]

 

Feels very much like we are on the edge of something, not sure what, but the steady state of the previous decade or two will cease to exist. 

So much going on, rising inflation looking to overshoot forecasts both in rate and duration, wages rising, push to green energy, increasing global competition for gas and oil.

Are we on the edge of the BK? Perhaps some money printing that goes off the scale? I have no idea but will do my best to be hedged for a range of scenarios.

A few things that caught my eye in the news, first one from the BBC and the rest DM doom headlines:

 

New Zealand raises interest rates for first time in seven years

Inflation is set to cost a typical family £1,800 by the end of the year and HALF have already started cutting back

Britain's energy crisis deepens as gas prices soar by a FIFTH to all-time high as experts warn surge could send household bills soaring to £1,700 a year

How to survive the big squeeze: Bills and prices are soaring, but don't panic! Here we share top tips for making crucial savings

• Inflation set to cost the typical family of four an extra £1,800 by end of the year
• Supermarkets have said food prices could increase by 5 per cent 
• Energy price cap rise to push up bills for 15m households by close to £140 a year
• One in two households have already started making cutbacks, our poll reveals 

 

 

EDIT - one more:

 

Christmas crisis deepens: Now nearly two-thirds of British manufacturers say they will raise prices in the next three months after being hit by mounting costs

 

 

 

[planit]

Interesting point on the planned Saudi production increase - 4 months ago they were saying the build to 13mmbpd would take until 2024, now they have said 2027, that is a big change in 4 months and shows it is much more difficult than they led everyone to believe.

 

Loads of good figures in this article

OPEC+ Raises November Oil Production Quota To 39.7 Million Bpd

 

• The two leaders of the OPEC+ group, Saudi Arabia and Russia, will each have a ceiling of production of 9.913 million bpd
• ...this would put Russian crude oil output at 9.83 million bpd, which would be 130,000 bpd above quota, as per Bloomberg calculations. Analysts say that Russia may have reached its capacity to produce oil...
• The OPEC+ group of producers raised their compliance with the production cuts to 116 percent in August, up from 109 percent compliance in July

 

[I think the 'cut' production is currently 5mmbpd which means they are 800kbpd short, equivalent to both Aug and Sep 'increases'. In fact the article says they have gone form 9% under supply to 15% so nearly all the increase didn't materialise. Hmmmm, I wonder if anyone noticed that]

 

 

[HousePriceMania]

Properly laughed out loud at this one...

 

 

[Barnsey]

Just listening to LBC about UC uplift ending today on the drive into work, classic example caller of the benefits mentality and the mess we're in.

Guy "can't work" because he's extremely dyslexic, 2 kids, says only jobs job centre finds him are minimum wage at discount retailers but he doesn't want them because poor career prospects, if he has any extra money he upgrades the food shop to branded goods. The radio host was of course incredibly sympathetic to him.

[Harley]

1 hour ago, Green Devil said:

They say inflation causes spending. Like fuck it does. Interested in buying large ticket items, car, house, campervan, boats? Have you looked at the prices recently, theyre soaring. No one is buying now, theyre waiting for the insanity to end (but will it?). 

Probably not.  It's not like the prices will likely come down.  At best, probably just better supply availability.  Temporary Giffin style goods?  Behavioural economics versus classical economics?

[Harley]

10 minutes ago, Barnsey said:

Just listening to LBC about UC uplift ending today on the drive into work, classic example caller of the benefits mentality and the mess we're in.

Guy "can't work" because he's extremely dyslexic, 2 kids, says only jobs job centre finds him are minimum wage at discount retailers but he doesn't want them because poor career prospects, if he has any extra money he upgrades the food shop to branded goods. The radio host was of course incredibly sympathetic to him.

Even JHB on TalkRadio saying benefits being cut (to go with her general narrative on "times are hard").  No mention it's actually the ending of a temporary uplift, not a cut.  Bad if even she's talking in this way.  And staying well clear of closing the circle - one talking about labour shortages and cuts to benefits  but not linking them.  Too toxic a subject?

[Green Devil]

7 minutes ago, Harley said:

Probably not.  It's not like the prices will likely come down.  At best, probably just better supply availability.  Temporary Giffin style goods?  Behavioural economics versus classical economics?

 

[Harley]

2 minutes ago, Cattle Prod said:

Just wait till OPEC has no more to add, you can see the tone of the article there is an assumption that OPEC have infinite supply. They still just dont get it. It'll be "OPEC chokes the market for rampant profiteering" while they'll be on the phone to Biden saying "Look, ask your own intelligence agencies. That's all we have, old man".

I call it "over-run" that period between how it was and the new normal.  Lots of things are overunning atm with maybe more to follow!

[nirvana]

44 minutes ago, invalid said:

How to survive the big squeeze:

me sir me, I know what it is! move out of Britain! hahaha I called it years ago 

[harp]

What’s the score with Guinness Global Energy Fund not updating since 30th Sept? Never this long? 

[HousePriceMania]

1 minute ago, nirvana said:

me sir me, I know what it is! move out of Britain! hahaha I called it years ago 

Should have listened to my mate and moved to France when the moving was good.

1 minute ago, harp said:

What’s the score with Guinness Global Energy Fund not updating since 30th Sept? Never this long? 

 

 

?

[belfastchild]

35 minutes ago, Cattle Prod said:

You have to laugh, really. I ordered a second cylinder of butane this morning.

Edit to add: there are plenty of refills availabe, but the cylinders are widely sold out in the SE. There is a silent bottled gas run in progress. The government treat us like children (Boris saying "we're not responsible for energy market stuff") but the trust is gone, and people arent as stupid as they think. Be self reliant in as many ways as you can.

Heard the same and posted about similar in NW england last week.
Noticed in the last week or so the supply of free cylinders on various sites here in NI has stopped. Anyone posting now is pointed in the direction of the suppliers who are now paying for the return of the cylinders.
I guess thats the end of the cylinder patio log burners!

[Heart's Ease]

 

It's all I'm seeing on my twitter feed...

[DurhamBorn]

1 hour ago, Sidd said:

@DurhamBorn Do you see the dollar still heading a lot higher from here or do you anticipate we will visit the 80's again before the next major run up?

Dollar hit the top of my bottom range so hit a target set in 2016,so i havent done a lot of work on currency lately as i positioned for other reasons in energy etc that the dollar affects the most.I still think a leg down in the dollar could hit yet ,but higher energy prices usually mean a shortage in dollars hence the squeeze at the moment.Energy price increases are running ahead of dollar printing at the moments,so they will have to print more,or energy prices must fall.

[nirvana]

Markets are not happy again today, sure that cunt at the FED has it under control 

 

[DurhamBorn]

1 hour ago, Barnsey said:

Just listening to LBC about UC uplift ending today on the drive into work, classic example caller of the benefits mentality and the mess we're in.

Guy "can't work" because he's extremely dyslexic, 2 kids, says only jobs job centre finds him are minimum wage at discount retailers but he doesn't want them because poor career prospects, if he has any extra money he upgrades the food shop to branded goods. The radio host was of course incredibly sympathetic to him.

He lazed around all his life.If he took that crap job at 18 he might be a manager now.The problem with welfare is it is more than the entry level jobs,so people never start.Thats why at 50 once the kids are over 18 they are stuffed.This inflation will lift wages,but it will eat hard into welfare because it is in the goods and services they use more off.The amount they burn waiting in the Mcdonalds drive through alone.There is no political will to cut UC etc,but they might tighten the rules and start to make it much more of a chore claiming.

[Talking Monkey]

4 hours ago, MrXxxx said:

And don't FOMO...good deals are not unicorns, so wait and like a London bus there will be another one along soon enough.

I'm a firm believer in this concept, there's a regular stream of opportunities that come through. Don't FOMO. 

[Noallegiance]

2 minutes ago, Talking Monkey said:

I'm a firm believer in this concept, there's a regular stream of opportunities that come through. Don't FOMO. 

Awaiting the day for this to be applied to housing!

I'm so far down the road I have no choice. No way I'm piling in now.

[Talking Monkey]

Just now, Noallegiance said:

Awaiting the day for this to be applied to housing!

I'm so far down the road I have no choice. No way I'm piling in now.

Ah yes I was talking about equities. The housing market is insane and has been for close to 2 decades

[Harley]

1 hour ago, Green Devil said:

 

I prefer...