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

[CannonFodder]

I like gold and silver but its a bit last century but so am I

Bullion dealers sell new metals to millennials

https://cardiffgold.co.uk/product/5kg-5000g-999-pure-copper-bullion-bar/

[spygirl]

25 minutes ago, DurhamBorn said:

Government still dont get it,increasing bennies etc is causing the inflation because they are printing the entire working age welfare budget.If they keep chucking more to bennies while letting inflation and tax hit low paid workers it will get worse and worse.Work doesnt pay,investment doesnt pay.Immigration is destroying finances as well as most are takers.Boris should be finished soon,his Blair mark 2 government is proving a disaster for an inflation.

Notice here how people are saying all parts of the process are increasing in price,thats why de-complex and cutting out parts of the chain will be key for people.Most who cant do anything,even cook are in for a huge shock.

https://www.bbc.co.uk/news/business-60050699

 

Cost of living: 'I only put heating on when my grandkids visit'

https://www.bbc.co.uk/news/uk-wales-59987507

Money has been so tight for grandmother Judith Criddle, she only ever puts her heating on when her six grandchildren visit - despite the cold weather.

Even then, Judith can only afford to put it on for an hour so she wraps her grandchildren in a blanket on the sofa with hot water bottles to keep warm.

"To them it's a movie night, cuddling in to nan - but to me, I'm doing it to save the money," said the 51-year-old.

Judith is one of the millions affected by the UK's cost of living crisis.

Prices are rising at the fastest rate in more than 10 years and one think tank has warned it could get worse with predictions that higher energy bills, stagnant wages and tax rises could leave households with an extra £1,200-a-year hit to their incomes.

Judith, who is on universal credit, said she was trying to cut back on using energy as much as she can, but "if it goes up any more I can't afford to live".

She coudl go out and get a FT job - or 2 -  FFS. Shes almost 20 years before she can reitre.

 

They had this woman on. She had a Caribbean accent - 

https://www.bbc.co.uk/news/uk-59980760

Every night, Thelma Spalding goes round her house trying to switch off every appliance.

It's not an easy feat for the 54-year old, who relies on carers and walks with a stick.

But she's following the advice given to her by her energy company as she desperately tries to keep her fuel bills down.

Thelma had to leave her job as an NHS support worker a year ago after being assaulted at work. Since then, her monthly gas and electricity bill has shot up from £44 to £99, meaning she can afford to heat only one room.

She has burns on her arms from trying to keep her wood burner going and has started using food banks to make ends meet.

She says: "I live in this one room. There's only me and the dogs, so why am I being charged this much for electricity and gas?

"In bed you're so cold that it's like you're sleeping outside. My carer gets me dressed and I wear two pairs of leggings, a pair of trousers, a vest, a T-shirt and a dress - and I'm in the house. It's so cold in the kitchen and the bathroom."

 

[nirvana]

can I ask a daft question? DeFi aka decentralised finance, it's gotta be the future shirley?

most on here are clued up enough to understand how the 'robber bankers' work, so as the FIAT system continues to collapse why won't more and more businesses move to DeFi? the only way they won't is due to government control cos the cunts have been paid off by the money men (yet again) ya?

[HousePriceMania]

There's a crash happening and no one's noticed.

[HousePriceMania]

38 minutes ago, Hancock said:

@HousePriceMania This is from "Hancock" in todays Telegraph, just when you thought it wasn't possible to despise this lying, cheating, crooked, weird communist little cunt any more he states 

https://www.telegraph.co.uk/news/2022/01/19/raising-interest-rates-beset-danger/

As all the focus in Westminster is on the latest revelations, the story that most affects people’s lives is the recovery from the pandemic.

Last week we learnt that the UK economy has recovered to its pre-pandemic size. As the Chancellor put it, this is down to the grit and determination of the British people. But it’s also down to the rapidity of the vaccine rollout, the massive uptake among the public, and the unprecedented level of economic support over the past two years.

Even with any short-term bump from omicron over Christmas, the immediate prospects look good and the UK is emerging sooner and stronger than most other nations. It’s like the pandemic is a bed of hot coals we have collectively had to walk across. Britain looks about to reach the other side, with sore feet but soon to step onto the soothing wet green grass beyond.

Because in the UK we invested in vaccines early, and because uptake has been so high, we are likely to be one of the first major nations in which Covid moves from pandemic to endemic and life can get back to normal.

This is a huge personal achievement for Boris Johnson. Yet this good news hides some rocks below the surface.

Top among them is the challenge of the cost of living, made worse by the global rise in energy prices. Policy can only alleviate this real pressure on households to a degree. There isn’t a quick fix, and any temporary support must be well targeted. But we can and should act in the medium term, with policies that cut both costs and emissions, like insulating homes.

But I fear that the political debate about the recovery is only skin deep. The UK’s economic performance since the 2008 crash has relied on ultra-loose monetary policy and near- or even below-zero interest rates. This can’t last forever. Yet unwinding a decades-long stimulus is beset with danger.

First, the huge injection of taxpayers’ money was vital to keep the economy afloat. This was an active policy choice. The economic disruption was due to decisions necessary to save lives; the economic support was there to help businesses through and – as yesterday’s employment figures prove – keep people in work, so we could rebound as well as possible when it was all over.

Yet this has come at a price. No event since the Second World War has had such a big economic impact. Last year the Government borrowed twice as much as at the height of the financial crisis. Fully a fifth of all the gilts ever issued have been issued in the past two years. Debts have to be paid.

Second, inflation is on the rise. Last week we saw US inflation rise to 7 per cent. In Britain, inflation has been at a 10-year high, and is expected to rise to its highest rate in almost 30 years. Once the inflation genie gets out of the bottle it is very hard to put it back in – so it is vital to bring it back to low and stable levels. But stopping inflation involves tough medicine too.

That brings us to interest rates. The Bank of England has already signalled that rates are expected to rise further. This raises profound questions that are not being debated in Westminster. How much will a rise in interest rates impact the housing market? When rates fell to near-zero levels over a decade ago, many people with mortgages kept some headroom in their budgets in case they rose again. But how many still have? How many families could cope with a rise to more normal levels of interest? Instead of keeping a cushion, many have used low rates to borrow yet more, and chased house prices up. It will take great skill to let the air out of this bubble safely.

How will the Bank start to unwind the massive amounts of quantitative easing? What will happen when the Government tries to borrow in the open markets, without the Bank snapping up all the new bonds? For almost two years the Bank rightly printed all the money the Government needed to finance the pandemic. What will happen when that, rightly, stops? What will happen to companies and pensions savings when interest rates rise and the bond market correspondingly falls? It was James Carville, Bill Clinton’s legendary strategist, who said that when he was reincarnated he wanted to come back as the bond market, because then you can intimidate everyone.

When I worked at the Bank, we put huge efforts into calibrating the impact of a rise in interest rates on how people behaved. It was difficult back then. But now, interest rates have been so low for so long it is hard to predict how people will respond. The risks are perilous. We must ensure banks and pension funds are well capitalised to be prepared for the risks to come. We must support entrepreneurs and job creators much more and we must never take for granted the economic recovery generated by business.

So, as we leave the hot coals behind us as we get over the tumult of the pandemic, recovery is going well. We must not squander it on the rocks ahead.

 

Edit - The fact he says that Westminster never debates the housing bubble, shows they clearly do.

Edit - His last comment about supporting job creators shows that cunts like him think they can control markets, if cunts like him would fuck off job creators and society would be far better off.

 

It's shocking when your realise it's a scam.

They've picked the market winners, themselves.

They've thrown everything at keeping it going.

I'd wager a lot of them will/have sold up.

The bankers are in charge, the MPs are little more than banker front men now.  Protect yourself as  best you can.

[Libspero]

41 minutes ago, Hancock said:

It will take great skill to let the air out of this bubble safely.

[nirvana]

17 minutes ago, spygirl said:

Money has been so tight for grandmother Judith Criddle,

everyone in the article is a fat useless cunt apart from the kids, 2 of which are on their bikes, what does that tell you about how the UK now works? lmao.....stop getting drawn in by all the click-bait, rise above it trooper!  

[Hancock]

4 minutes ago, Libspero said:

So as someone who worked at the bank of England he is admitting they intentionally blew a bubble.

My recollection of chasing bubbles as a child was they popped ... seems he's getting his bubbles and balloons mixed up!

[CannonFodder]

2 minutes ago, nirvana said:

everyone in the article is a fat useless cunt apart from the kids, 2 of which are on their bikes, what does that tell you about how the UK now works? lmao.....stop getting drawn in by all the click-bait, rise above it trooper!  

Am sure the bbc are more than happy to freeze their license fee to help Ms Criddle

OR even have it abolished altogether

 

[spygirl]

4 minutes ago, nirvana said:

everyone in the article is a fat useless cunt apart from the kids, 2 of which are on their bikes, what does that tell you about how the UK now works? lmao.....stop getting drawn in by all the click-bait, rise above it trooper!  

Posted to show where theres lots of fat to cut.

 

[Democorruptcy]

1 hour ago, The Bear of Doom said:

CPI 5.4% and RPI 7.5% 

BT and VOD set the price increases for some tariffs using the inflation figures released this month.

For BT it is CPI + 3.9% so it will be 9.3% from March

For VOD it is CPI + 3.9% for customers who took on a home broadband plan from 02/02/2021, otherwise it is the RPI figure from March. In both cases the increase is applied in April.  For Mobile customers, the March RPI figure is used for customers who took out a plan before 09/12/2020, for plans taken out after that date, an increase of CPI + 3.9% is applied.

Do you really need all that data or a new phone this year?

[DurhamBorn]

1 hour ago, The Bear of Doom said:

CPI 5.4% and RPI 7.5% 

BT and VOD set the price increases for some tariffs using the inflation figures released this month.

For BT it is CPI + 3.9% so it will be 9.3% from March

For VOD it is CPI + 3.9% for customers who took on a home broadband plan from 02/02/2021, otherwise it is the RPI figure from March. In both cases the increase is applied in April.  For Mobile customers, the March RPI figure is used for customers who took out a plan before 09/12/2020, for plans taken out after that date, an increase of CPI + 3.9% is applied.

And they will lose zero sales and they are depreciating assets at set rates and the debt part of the balance sheet is mostly fixed at 2.5%.Example of how in an inflation wealth is passed from debt to equity in inflation loving areas.Risk governments legislate,but doubt it as prices are low and they want telcos investments.If net neutrality goes in any form telcos will double,or treble in the cycle i think.

[HousePriceMania]

5 minutes ago, Hancock said:

So as someone who worked at the bank of England he is admitting they intentionally blew a bubble.

My recollection of chasing bubbles as a child was they popped ... seems he's getting his bubbles and balloons mixed up!

He's admitting the tories rigged a market, they should be jailed.

[DurhamBorn]

4 hours ago, wherebee said:

ideally, you want to find an old timer who traded into the 70's and got rich under the radar.

My dad knew one, but he ended up in jail and died....

I did,he taught me and iv got all his tools.He was Peter Lynch's macro feed for a long time.He ended up in Florida not jail though 

[M S E Refugee]

2 minutes ago, DurhamBorn said:

And they will lose zero sales and they are depreciating assets at set rates and the debt part of the balance sheet is mostly fixed at 2.5%.Example of how in an inflation wealth is passed from debt to equity in inflation loving areas.Risk governments legislate,but doubt it as prices are low and they want telcos investments.If net neutrality goes in any form telcos will double,or treble in the cycle i think.

The information on this thread is incredible, it has totally transformed the way I look at things, unfortunately my pea brain can't process all of the information but it is fascinating nonetheless.

I am very appreciative of you and all of the other posters on this thread.

[DurhamBorn]

1 hour ago, Libspero said:

To play devils advocate,  who makes the own brands?  If it is the same giants then what stops them putting those lines up too?  

Then you have the idea that in a recession people spend more on small treats because they can’t afford big treats.  Will the ladies give up on their little luxuries,  or spend more to make them feel better?  I don’t know if I’m honest,  but something to think about.

So at best they work hard to stand still.Most are trading at 2x or even 4x their turnover market cap.I wouldnt buy anything in Fundsmith' top companies at these prices.

 

[Harley]

1 hour ago, Libspero said:

To play devils advocate,  who makes the own brands?  If it is the same giants then what stops them putting those lines up too?  

Then you have the idea that in a recession people spend more on small treats because they can’t afford big treats.  Will the ladies give up on their little luxuries,  or spend more to make them feel better?  I don’t know if I’m honest,  but something to think about.

Based on my personal experience from orange juice to diving gear to tools, usually the same company actually "makes" them, or a best just a few.  In all cases, they have separate lines to adjust the quality/spec based on the customer requirement.  In the fruit juice case, the same Israeli concentrate goes in, just with varying amounts of bits added back, etc in each line (one line per customer).

That spending on treats idea seems a bit weak to me in terms of just how material are the numbers.  Sure, has an effect, but a sufficiently big enough one to care about?

[Harley]

 

He's admitting the tories rigged a market, they should be jailed.

It was called the "wealth effect".  A load of self serving BS!

[Harley]

 

The information on this thread is incredible, it has totally transformed the way I look at things, unfortunately my pea brain can't process all of the information but it is fascinating nonetheless.

I am very appreciative of you and all of the other posters on this thread.

Your sector intel is appreciated.

[Harley]

 

Good reminder, spy. This ensures a future generation of crushed productivity. Students will be incentivised to work in another country or work part time to stay below threshold. It goes without saying that 10.3% interest without repaying principal compounds rather badly:

If inflation stays around here for the next 7 years averaged, a student running up say 75k in student debt will double it within 7 years of leaving university, not enough time to get up the pole far enough to pay it off in almost all professions. Why bother? Imagine having £150k around your neck at 28 years of age? Sod that, off to Australia.

The other likely outcome of course is "Sod University" which would be  good thing. Let it go back to 10/15% of school leavers and let of the polys and paper mills die off.

Of course that curve explains it neatly: it's exponential. Exponential curves are unstable, something has to break.

Have the bankers and co bought all the good loan books yet?

[HousePriceMania]

12 hours ago, CannonFodder said:

What site is that please, i like the interface

Took it off twatter.

[sancho panza]

On 17/01/2022 at 12:17, AWW said:

The government wants both parents working, as that then creates another job (and source of taxation) in the form of childminders.  I'm the sole earner in my household.  We don't get child benefit, we don't get tax relief on nursery fees, I don't even get a personal allowance FFS. It's our choice, as we want our kids to be brought up by their parents, not childminders.

The amount of tax that is taken off me is, frankly, sickening. Obviously, we're pretty comfortable, but we're not rich by any means, and while the loss of child benefit is obviously unwelcome, I can understand it. The loss of personal allowance, however, just boils my piss, and it happens right around the salary range to properly fuck over those who are doing alright.

We're reaching the end game here AWW.I was talking to a lady at a kids playgroup tuesday(I have the littlest one all day that day) and she was saying the middle class are starting to get really squeezed finanacially to the extent some increasingly arne't middle class any more.

Very much reflecting @DurhamBorn thesis that the amount of people living off the workers is becoming unsustainable.

Something's happening at my work with people suddenly just handing their notice in and leaving-Ambulance service.It's not vaxx related but jsut a lot of people unhappy with their pay/poo ratio I guess.Trainee Para starts on £20k plus unsocial.For that they're working weekends/nights and dealing increasingly with people who have completely lost their moral compass through either drink/drugs or isolation from society.Paras first two years start at £25k plus unsocial and for that they're dealing with all the same things as the trainee para except the legal responsibility is with them if someone dies/sues and they also have to oversee the trainee.

I've said for sometime that the ramifications of lockdown would be felt long after it stops and that the law of unintended consequences would apply.One likely result will be more and more middle class taxpayers opting out of paying.

Hearing anecdotally as well that lots of GP's are going part time too.Boris has really f***ed this up.He thought he was Churchill fighting a war on covid and yet actually he was Neville Chamberlain starting one with his own taxpayers.Words genuienly fail me with regard to this govt.

 

PS Admire your stance on raising kids.

On 17/01/2022 at 13:31, Harley said:

  Fake asset rich, real cash poor.  TPTB have played a blinder as most sucked it up.  Economic lesson in real value, etc incomming.  Per my earlier post, don't cry into their stale beer.

The bit in bold times ten.Your average basement dweller knows whats coming but per centage wise very few others,not least our sleeping political class.

On 17/01/2022 at 14:28, planit said:

For David Hunter to be correct we need more than just a sector rotation,

It does look likely that post Covid excitement will result in an economic boom which will push everything skywards and the resulting oil price shock and FED fast tightening will slam us into the BK. (Q3 might be enough time)

I just want to see a downside inflation spark to ignite it.

 

 

Must say,I'm starting to consider going firm on timings myself for the BK.

Oil price moving up-tick,it's called every one of the last four recessions to some degree.All of a sudden I'm getting people who were laughing at me buying oilies last year as we were going green,texting me for my take on which to buy.A sign in itself.

Im not in agreement on the subdued inflation print in the US.I think they're inflation data will push the dollar down one last time and then we'll get the crack up boom in oil,then BK,deflationary wave,banks down(again) and then the decade long fiscal reflation trade.

Need to update my BK checklist if I get time this week and do some work on it.

[No One]

32 minutes ago, Cattle Prod said:

Good reminder, spy. This ensures a future generation of crushed productivity. Students will be incentivised to work in another country or work part time to stay below threshold. It goes without saying that 10.3% interest without repaying principal compounds rather badly:

If inflation stays around here for the next 7 years averaged, a student running up say 75k in student debt will double it within 7 years of leaving university, not enough time to get up the pole far enough to pay it off in almost all professions. Why bother? Imagine having £150k around your neck at 28 years of age? Sod that, off to Australia.

The other likely outcome of course is "Sod University" which would be  good thing. Let it go back to 10/15% of school leavers and let of the polys and paper mills die off.

Of course that curve explains it neatly: it's exponential. Exponential curves are unstable, something has to break.

Wait wait wait. Student loans are linked to CPI . Fuck

[JMD]

2 hours ago, Sugarlips said:

Agreed, I imagine most are buying a brand out of habit, if Pantene goes from 2 for £5 to £4 each it might be worth the effort to walk to pound land after and get Pingtang or whatever the knock off version is for half the price

Not heard of Pingtang, but my local pound store has started selling 'Agent Orange' - don't know if its any good, but apparently it's a best seller... however not many return customers for some reason!!

[Harley]

I maintain a list of US ETFs for option trades and to feel the global market pulse.  Countries, regions, global sectors, and commodities.  56 in total and all down yesterday bar two (very minor increases in commodities and energy).  Many by quite a lot.  So I reviewed the underlying technicals and most are weakening (e.g. overbought on the weekly and monthly and weakening).  Sure things could turn and get more overbought but that's not normally sustainable (e.g. a blow off top).  It's all looking very tired.