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

[Harley]

5 minutes ago, Axeman123 said:

Isn't that just because the UK market closed before lunchtime west coast US time, when TLT was still also up for the day?

Genuine question.

I live in the uk so convert things usd to gbp or, as here, use the gbp equivalents like ibtl.  I'm not even sure you can buy tlt here in the uk.  Tlt is marginally up on the us markets but the usd is up against gbp so ibtl is up more as it's not a hedged version of tlt, just listed on the lse in gbp at the prevailing exchange rate.

[Axeman123]

Just now, Harley said:

I live in the uk so convert things usd to gbp or, as here, use the gbp equivalents like ibtl.  I'm not even sure you can buy tlt here in the uk.

No, I follow that part. IBTL trades on London stock exchange, which closes at 4pm our time or whatever. TLT trades on the New York exchange, which keeps different (US) hours.

I think (correct me if I am wrong):

Market makers can exploit arbitrage when the value of the two diverge, during hours when both exchanges are open. This is the mechanism which keeps both moving in lockstep. IBTL will therefore near instantly move to match TLT's close at the London open tomorow.

[Hancock]

12 minutes ago, Harley said:

They say the trucker shortage was due to foreign truckers doing a bunk back home with our money.

Certainly plausible.

I wish i had taken the 50k, to not do so and put it in my SIPP was a school boy error ... would have merely been taking back the money of mine they're inflating away.

[Harley]

25 minutes ago, Axeman123 said:

No, I follow that part. IBTL trades on London stock exchange, which closes at 4pm our time or whatever. TLT trades on the New York exchange, which keeps different (US) hours.

I think (correct me if I am wrong):

Market makers can exploit arbitrage when the value of the two diverge, during hours when both exchanges are open. This is the mechanism which keeps both moving in lockstep. IBTL will therefore near instantly move to match TLT's close at the London open tomorow.

Sorry, scrub what I said.  I was set on HA candles!  Not sure about tlt as my live feed is post market trading prices and they currently make it red for the "day".  Not sure what it was at the us close.  But ibtl was up at the uk close.  Yes, should wash out on the uk open tomorrow (us after market trading lasts about another one and a bit hours and then we have c.24 hour Forex).  Usd has been trending up against gbp these last few days.

PS:  And then we have pre market trading!  A messy business!

[WICAO]

The last couple of weeks have been an absolute blood bath for me.  Measured in AUD my total portfolio is now back to where it was at the end of October 2021...

On a more serious note I am watching the falls as it might give me a chance to sell down some assets held in Aus taxed UK wrappers and move them into something similar in my Australian Superannuation with no capital gains to be paid.  Need another few percent yet though.  

[Lightscribe]

Fed paper on CBDCs published this month, what a coincidence.

https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf

Money and Payments: The U.S. Dollar in the Age of Digital Transformation
January 2022

‘For a nation’s economy to function effectively, its citizens must have confidence in its money and payment services. The Federal Reserve, as the nation’s central bank, works to maintain the public’s confidence by fostering monetary stability, financial stability, and a safe and efficient payment system.

This paper is the first step in a public discussion between the Federal Reserve and stakeholders about central bank digital currencies (CBDCs). For the purpose of this paper, a CBDC is defined as a digital liability of a central bank that is widely available to the general public. In this respect, it is analogous to a digital form of paper money. The paper has been designed to foster a broad and transparent public dialogue about CBDCs in general, and about the potential benefits and risks of a U.S. CBDC. The paper is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a U.S. CBDC.

Payment technologies offered by the Federal Reserve have evolved over time. In the Federal Reserve’s early years, it established a national check-clearing system and used dedicated tele- graph wires to transfer funds between banks. In the 1970s, the Federal Reserve developed an automated clearinghouse (ACH) system that offered an electronic alternative to paper checks. And in 2019, the Federal Reserve committed to building the FedNowSM Service, which will provide real- time, around-the-clock interbank payments, every day of the year.

Recent technological advances have ushered in a wave of new private-sector financial products and services, including digital wallets, mobile payment apps, and new digital assets such as cryp- tocurrencies and stablecoins. These technological advances have also led central banks around the globe to explore the potential benefits and risks of issuing a CBDC.

Federal Reserve policymakers and staff have studied CBDC closely for several years, guided by an understanding that any U.S. CBDC should, among other things

• provide benefits to households, businesses, and the overall economy that exceed any costs and risks;

• yield such benefits more effectively than alternative methods;

• complement, rather than replace, current forms of money and methods for providing financial services;

• protect consumer privacy;

• protect against criminal activity; and

• have broad support from key stakeholders.

The Federal Reserve is committed to soliciting and reviewing a wide range of views as it continues to study whether a U.S. CBDC would be appropriate. Irrespective of any ultimate conclusion, Federal Reserve staff will continue to play an active role in developing international standards
for CBDCs.’

[BadAlchemy]

I started reading that CBDC paper. They must think we are stupid. (Granted, most people are when it comes to finance). 

"Money serves as a means of payment, a store of value, and a unit of account."

"Money takes several forms: central bank money, commercial bank money, non bank money"

No. Those things are currency not money and they are tools of enslavement, not stores of value.

The Fed was no doubt created with good intentions (provide currency elasticity etc) to begin with, but highly doubt they will give us, or be allowed to give us, an actual store of value after all this time, and certainly they will not be allowed to give us any 'financial privacy'.

Anyway, I dont want to derail the thread but maybe I will send them the Mike Maloney video "The Biggest Scam in the History of Mankind" and say I think a massive apology is in order first, and only then can we talk about your 'CBDC' !

Fantastic video. Do watch if you haven't already seen it.

[HousePriceMania]

Friend of a Friend in the US is telling us the papers are full of stuff about the stock market bubble, esp tech stocks, being blown by covid stimulus.

Who invests in the stock market after it's been called out as a bubble ?

[Noallegiance]

3 hours ago, BadAlchemy said:

I started reading that CBDC paper. They must think we are stupid. (Granted, most people are when it comes to finance). 

"Money serves as a means of payment, a store of value, and a unit of account."

"Money takes several forms: central bank money, commercial bank money, non bank money"

No. Those things are currency not money and they are tools of enslavement, not stores of value.

The Fed was no doubt created with good intentions (provide currency elasticity etc) to begin with, but highly doubt they will give us, or be allowed to give us, an actual store of value after all this time, and certainly they will not be allowed to give us any 'financial privacy'.

Anyway, I dont want to derail the thread but maybe I will send them the Mike Maloney video "The Biggest Scam in the History of Mankind" and say I think a massive apology is in order first, and only then can we talk about your 'CBDC' !

Fantastic video. Do watch if you haven't already seen it.

For me, we're starting to see the consequences of what happens when the yardsticks by which things are measured in society are not fit for purpose. Choices made as a function of broken measuring devices are poor choices. But when measured via the flawed system they can, for a while, appear to be good choices.

Receiving education is fine. But if that education is developed from a flawed system then it must follow that the education is flawed.

That counts for 'healthcare' as well as finance. 

One can ignore reality. But one cannot ignore the consequences of ignoring reality.

[Noallegiance]

Oh look. Hang on. The BoE didn't raise rates......how could this possibly happen?!

Mr Market is stirring...

https://www.bbc.co.uk/news/business-60117150

[HousePriceMania]

2 minutes ago, Noallegiance said:

Oh look. Hang on. The BoE didn't raise rates......how could this possibly happen?!

Mr Market is stirring...

https://www.bbc.co.uk/news/business-60117150

Sunak seems to think the property bubble and stock market ( stuff he and his mates are invested in ) are more important than people heating their houses or feeding their kids.  Are these people psychopaths ?

Anyway, another day of up is down and down is up today 

[JMD]

Market Sentiment - 'Fear and Greed' - Indicators...                                                                                                      https://money.cnn.com/data/fear-and-greed/

[geordie_lurch]

19 minutes ago, Noallegiance said:

Oh look. Hang on. The BoE didn't raise rates......how could this possibly happen?!

Mr Market is stirring...

https://www.bbc.co.uk/news/business-60117150

"The Office for National Statistics (ONS) said interest on government debt hit £8.1bn last month - up from £2.7bn a year earlier."

[Axeman123]

14 minutes ago, Noallegiance said:

Mr Market is stirring...

Two quotes from your link really stood out:

"The Office for National Statistics (ONS) said interest on government debt hit £8.1bn last month - up from £2.7bn a year earlier."

"About a quarter of public debt is linked to inflation as measured by the Retail Prices Index. And that inflation is now at a 30-year high of over 7%, and is set to rise further in the coming months."

On the one hand I am pleased to see reality asserting itself, and the thread thesis being borne out. On the other it really is frightening how bad a mess we are in as a nation.

I imagine Pishy's legacy will be solely defined as the man that didn't issue century bonds at sub 1% when he had the chance.

[HousePriceMania]

1 minute ago, geordie_lurch said:

"The Office for National Statistics (ONS) said interest on government debt hit £8.1bn last month - up from £2.7bn a year earlier."

Why would an ex-GS banker  get us into so much debt with bankers ?

[BadAlchemy]

15 minutes ago, Noallegiance said:

Oh look. Hang on. The BoE didn't raise rates......how could this possibly happen?!

Mr Market is stirring...

https://www.bbc.co.uk/news/business-60117150

There is a link within that article explaining "How does the government borrow money" https://www.bbc.co.uk/news/business-50504151

Fascinating to compare and contrast it with Mike Maloney's explanation. They, of course, miss out the key bits: 1. The borrowing is what is causing the inflation and cost of living rises. 2. The BoE just magic up the new currency out of thin air. 3. You and your children, and their unborn children, get to slog your nuts off trying to keep up the payments on it all.

It's a start, I suppose. Can the average BBC reader connect the dots, I wonder? If they do manage to read all the way to the end then the last sentence gives it all away...

"The government does repay debt on due dates, but usually has to borrow new money - and take on more debt - to do so."

That's right folks, it's all one massive ponzi scheme. 

[HousePriceMania]

6 minutes ago, BadAlchemy said:

There is a link within that article explaining "How does the government borrow money" https://www.bbc.co.uk/news/business-50504151

Fascinating to compare and contrast it with Mike Maloney's explanation. They, of course, miss out the key bits: 1. The borrowing is what is causing the inflation and cost of living rises. 2. The BoE just magic up the new currency out of thin air. 3. You and your children, and their unborn children, get to slog your nuts off trying to keep up the payments on it all.

It's a start, I suppose. Can the average BBC reader connect the dots, I wonder? If they do manage to read all the way to the end then the last sentence gives it all away...

"The government does repay debt on due dates, but usually has to borrow new money - and take on more debt - to do so."

That's right folks, it's all one massive ponzi scheme. 

you couldnt make that up.

Buy gold. Buy silver. Buy shares in real stuff. Buy a house and a big ****ing TV.  Choose assets.

[Castlevania]

Did my UK tax return. Total tax paid for the year: £0.

*I live abroad, but still feels good to not give those twats running the U.K. any of my money

[Harley]

1 hour ago, Noallegiance said:

For me, we're starting to see the consequences of what happens when the yardsticks by which things are measured in society are not fit for purpose. Choices made as a function of broken measuring devices are poor choices. But when measured via the flawed system they can, for a while, appear to be good choices.

Receiving education is fine. But if that education is developed from a flawed system then it must follow that the education is flawed.

That counts for 'healthcare' as well as finance. 

One can ignore reality. But one cannot ignore the consequences of ignoring reality.

Exactly, as I have been saying from a few years back.  The burning building metaphor, etc where the burning building is the current system.  You don't necessarily (i.e without challenging) want to be optimising things within (i.e. with reference to) the building.  Best to step outside and see the bigger picture to decide on your yardstick.  You need to choose your unit of measure very carefully at this turning and have eyes in the back of your head to consider things in the round (i.e. relativity).  And choosing a uom leads on to the whole discussion of true "value" in it's widest form.  The picture I have is of the German lady in her furs rummaging through the ruins of post war Germany or even the hyperinflation before, or worse as seen only recently in Venezuela. 

Related, I listened to a recent podcast with an MMT/UBI advocate.  Painful as I have been here before.  My serious economic studies started when the full impact of the damage done in Latin America, etc by the political proponents of Chicago School et al was clear to see.  That was the last major run of the "Hubris of the Economist" and I fear enough time has passed for a repeat. 

My first two years at uni were a repeat of my AS level so I spent my time either modelling with the mainframe in the "lab" or soldiering.  I was out of it by year three but pulled in a fair degree with a First on the question "is economics an art or a science".  Yep, I learnt a bit about hubris which has at least kept me in good stead.

[Harley]

38 minutes ago, BadAlchemy said:

There is a link within that article explaining "How does the government borrow money" https://www.bbc.co.uk/news/business-50504151

Fascinating to compare and contrast it with Mike Maloney's explanation. They, of course, miss out the key bits: 1. The borrowing is what is causing the inflation and cost of living rises. 2. The BoE just magic up the new currency out of thin air. 3. You and your children, and their unborn children, get to slog your nuts off trying to keep up the payments on it all.

It's a start, I suppose. Can the average BBC reader connect the dots, I wonder? If they do manage to read all the way to the end then the last sentence gives it all away...

"The government does repay debt on due dates, but usually has to borrow new money - and take on more debt - to do so."

That's right folks, it's all one massive ponzi scheme. 

Roll me over in the clover  

Roll me over

Lay me down

And do it again

[Loki]

1 hour ago, HousePriceMania said:

Friend of a Friend in the US is telling us the papers are full of stuff about the stock market bubble, esp tech stocks, being blown by covid stimulus.

Who invests in the stock market after it's been called out as a bubble ?

It went ballistic after being described as a BIG FAT UGLY BUBBLE by President 45

[Yellow_Reduced_Sticker]

Just as predicted on here!

 

"State pension age changes keep thousands more in paid work"

 

Anyways...are YOU guys feeling chirpier today with the markets UP?

 

My tea leaves are telling me markets are down tomorrow, I'll even bet (YRS packet of pork chops ) it will happen, any takers? @MrXxxx

[HousePriceMania]

28 minutes ago, Cattle Prod said:

It's interesting to parse that article, isn't it. BBC spouting the govt line, or thick journalist? Who knows.

Is shortly followed by:

Really? Give me some of those gilts baby, I'll load the f'n boat! A bit further down:

Ah dammit, only a quarter now. Who are the lucky sods who have those gilts, can't be all NS&I, can it?

So if a quarter are RPI linked, it means that three quarters are not. So three quarters of the debt is below the level of inflation. Because it's government debt, they get nice low fixed rates, it's being eroded away at a rapid pace. The three quarters being eroded far exceeds the quarter that is going up with inflation. Now do you have to be thick, or a propagandist to not notice this?

And there is a monumental gaslighting threaded through it: owners of that debt (such as the BOE pension fund) have their savings protected from inflation. But YOU don't, plebs:

https://www.theguardian.com/money/2022/jan/23/hopes-shattered-as-banks-fail-to-pass-on-interest-rate-rise

"Hopes shattered" .. wft? Ok, again, thick journos aside, who was really banking on a .25% rise in deposit interest to save their asses? Inflation has just wiped out ~30 years of that interest income in the year you've been waiting for it. In a related matter, my son has recently started secondary school, and I've had to write to his maths teacher twice to ask why he doesn't have a textbook. There isn't one, apparently. When the f'n hell did that happen?? 

Hopes shattered as criminal bankers with a banker in No 11 are allowed to rob people.

[Loki]

5 minutes ago, Yellow_Reduced_Sticker said:

Just as predicted on here!

 

"State pension age changes keep thousands more in paid work"

 

Anyways...are YOU guys feeling chirpier today with the markets UP?

 

My tea leaves are telling me markets are down tomorrow, I'll even bet (YRS packet of pork chops ) it will happen, any takers? @MrXxxx

Finish lower or just lower at some point in the day?

[DurhamBorn]

2 hours ago, HousePriceMania said:

Friend of a Friend in the US is telling us the papers are full of stuff about the stock market bubble, esp tech stocks, being blown by covid stimulus.

Who invests in the stock market after it's been called out as a bubble ?

People saving in pensions that goes into tracker type funds,60/40s have big weighting in tech.