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

[Loki]

1 hour ago, Bobthebuilder said:

Thought I would share a story that opened my eyes to this current inflation, nothing new to the hive mind on here of course, but I found it a good way of explaining it to my wife / family.

I went to the local corner shop the other week to buy a bag of pasta, just a small simple bag of penne pasta. Saw it on the shelf 99p as usual, bought it and went home. It was only when I went to cook it that I noticed it was now 400g not the usual 500g, (shrinkflation as we are all aware).

Then it hit me, the £100k I have sat in my savings account had just lost £20k based on little bags of pasta. Gone forever, never coming back, brutal, really brutal when viewed in such a simple way.

And it is only just starting.

BRUTAL.

We should start making houses out of pasta

[Lightscribe]

6 minutes ago, Noallegiance said:

Can someone knowledgeable commentate on these, please?

With this...

Ever seen The Big Short?

https://www.investopedia.com/articles/investing/020115/big-short-explained.asp

[Animal Spirits]

4 hours ago, Lightscribe said:

 

I've just looked at the DTCC data on Agency fails and there are zero reported for March so far, this is displaying daily data unlike the chart in the Tweet:

Treasury fails also on a gradual increase since December but flatish on a 1 year trend:

I also see the Primary Credit Facility has seen a pickup in volumes around the same time:

As you may know, there is now a standing repo facility. Chart from NY Fed:

And Reverse Repo:

TED spread from Macro Trends:

Certainly worth watching for any trends that develop and it can change quickly. There is a lot more market volatility; some due to priced in rate hikes and some evidently due to concerns surrounding conflict in Ukraine.

See the difference between US bond and US equity volatility:

 

[JMD]

16 hours ago, M S E Refugee said:

I think Ayn Rand sums up the shit we are in.

Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot

-Ayn Rand

Ayn Rand was a very interesting thinker, particularly given her personal background and also the time period in which she developed her ideas. But when I first learned that she was merely written off and smeered by the Left as being just another typical right-wing 'swivel eyed loon', I despaired that simplistic tribalistic politics meant that in effect no 'political solution' could ever resolve the big - economic/social - problems that we faced... I think this excellent thread underlines and illuminates that thesis.

[MrXxxx]

3 hours ago, Lightscribe said:

Yup, that’s my line of thinking also. The WEF future goals were always pencilled in of course, but the unsustainable debt of the Western economy meant it wasn’t really factored into the future ‘sustainable’ plans in its current form.

The UK especially laughable. Produce hardly anything, import everything and get other people to do it all for us cheaper. Why would we need anything else when we can buy and sell houses to one another and live on benefits? What could go wrong…

Add to this, we still have a superiority complex as a byproduct of the position we once had as Imperialists....unfortunately politicians and the general public still think we are what we were 100 years ago!

[DurhamBorn]

1 hour ago, Starsend said:

And where did that £20k that you grafted so hard for go?

Well the value of the Government's debt has decreased by a corresponding amount. You are directly paying for the millions of single mums they encouraged, the hundreds of thousands of immigrants they let in, the millions of EEs they gave a grand and a half a month to in exchange for 16 hours in a cleaning job, the millions sat on their arses for the last decade or two and the endless waste and incompetence, oh and of course the lovely assets acquired using cheap money by the elite in the know.

Evil, bunch of parasites stealing of those who've worked hard.

All you can really do is opt out of their bent system as much as possible.

Thats exactly where it went,they printed the working age welfare budget for 15 years.There is going to be massive anger when people see state workers and council workers retiring on big inflation protected pensions while they are skint.There will be massive pressure for more bennies,but bennies are now so large that they will destroy the currency.Half the population living of others work.Bojo is useless of course,all our polos have been for decades.

[dnb24]

As part of the thread penny pinching ways- if any of you lot are into wood making/cladding or even wood for heating systems- have a look around local industrial estates- I have a container cladding company near me who have to strip out old containers - the wood isn’t fantastic but cleans up well- good enough to make half decent furniture/cladding- they pay £4K a month to get rid of it- so if anyone asks they’ll let it out the back gates for nothing. 

[Democorruptcy]

2 hours ago, Bobthebuilder said:

Thought I would share a story that opened my eyes to this current inflation, nothing new to the hive mind on here of course, but I found it a good way of explaining it to my wife / family.

I went to the local corner shop the other week to buy a bag of pasta, just a small simple bag of penne pasta. Saw it on the shelf 99p as usual, bought it and went home. It was only when I went to cook it that I noticed it was now 400g not the usual 500g, (shrinkflation as we are all aware).

Then it hit me, the £100k I have sat in my savings account had just lost £20k based on little bags of pasta. Gone forever, never coming back, brutal, really brutal when viewed in such a simple way.

And it is only just starting.

BRUTAL.

Don't you find it a bit hard to eat straight out of the packet? Oh no... I've gone and upset you about the cooking costs now. That £100k is down to about £30k.

[Harley]

1 hour ago, Starsend said:

I was down on them dogs for years, finally nicely in profit. Still not paying a decent divi yet though.

No div, no play!

2 hours ago, Starsend said:

Anybody have any thoughts on Sibanye Stillwater? 

"Sibanye-Stillwater is the world’s largest primary producer of platinum, second largest primary producer of palladium and third largest producer of gold"

I believe Russia produce 40% of the world's palladium so they might be about to lift off. Extra tasty juicy dividend as well. My only concern is that they've run up a lot in the last couple of years. 

I own.  I also bought platinum.

[Harley]

2 hours ago, JimmyTheBruce said:

Absolutely love it.

Sorry to say it again but.......cup and handle it was.  And then another chance if you missed it! But it was the div for me.  No div, no.....ok, I'll stop now!

PS:  It's called trend trading, with some hot divy sauce!

[JMD]

16 hours ago, Chewing Grass said:

I ditched my membership this year as Costco is 12 miles away so 24 mile round trip plus £30 membership.

Fuel running cost of vehicle is/was 24p/mile so that's £5.76 and tank capacity is 40 litres.

So even if its 20p litre its not worth going out the way anymore.

But do your calculations, include the option of also removing your car spare tyre?!               ...There was discussion here recently regarding the carrying a spare tyre vs using a tyre sealing kit (which effectively destroys the tyre). Well if tyre weight equals approx 0.5% of average car weight (ok car weight is not the only fuel determining metric, but mostly is), and if stats show the average driver gets one puncture that will require fixing at roadside (ie not a slow puncture which allows to drive home to fix puncture) for every 8+ years driving/£12,000+ petrol cost (£1500/year) - then it's roughly beak evan. However, if you do higher mileage than the average driver, then a car tyre sealant kit becomes increasingly the more economic option.... Not advice, please do your own research - oh, and please drive carefully!!

[JMD]

21 hours ago, Cattle Prod said:

That really is the key to the whole thing, isn't it? You can print fiat, but you can't print energy. And practically no one understands that. I've been astonished at the "get fracking/ramp up production" from so many different quarters over the last week. Its like this view of abundant energy has permeated absolutely everywhere. People are in for a big big shock and they won't understand why. They'll be looking for someone to blame. Could be me, the Italians tried to charge some geologists with a criminal offence for not predicting an earthquake 

I put a thought experiment on here a few years ago to demonstrate how cheap a barrel of oil is: drive your car 30 miles somewhere, costing you a fiver. Then push it back. Or hire people to push it back. A barrel of oil is probably worth £20k in equivalent human labour, yet in our consumption lifestyles, we scream murder and economies collapse when it goes over $100. And the only response they have to that is...print more fiat.

I once saw a YouTube video (unfortunately can't find it to link to) which likened the value that the average Westerner derives from each barrel of todays cheap oil as being comparable - in a broad historical context - as having/owing 1000 slaves. His point was that this analogy not only helps show the true value of cheap oil energy, but also graphically explains why and how our living standards have epically increased... We are all living like medieval kings!                                        (plus he further explained that modern tech is merely an enabler, necessary yes, but that throughout history all kinds of machines, inventions etc, have been put to work by harnessing various forms of 'ineficient' energy, water, oxen, human sweat!)

[Democorruptcy]

18 hours ago, Chewing Grass said:

I ditched my membership this year as Costco is 12 miles away so 24 mile round trip plus £30 membership.

Fuel running cost of vehicle is/was 24p/mile so that's £5.76 and tank capacity is 40 litres.

So even if its 20p litre its not worth going out the way anymore.

I've got a Tesco home delivery coming for £2.50 that would be a 40 mile round trip for me. Someone has to pick it, load it, drive it and then there's the van and fuel costs. It seems like tremendous value! I know in general Tesco are more expensive than some but there's always something on offer and the Aldi price matches.

[Noallegiance]

1 hour ago, Harley said:

No div, no play!

I own.  I also bought platinum.

Glad I didn't have that attitude to Intrepid Potash!

[Castlevania]

1 hour ago, Harley said:

No div, no play!

I own.  I also bought platinum.

Oxxy during my period of ownership paid a quarterly dividend of US$0.01. I then paid 15% withholding tax on that. When the dividend hit my bank account I’d have around £2.50 from my 400 shares and I really wondered why they bothered. First Majestic also pay a dividend of next to nothing and again why bother?

[spunko]

Just to let everyone know, there is a new subforum down here in the Basement, for discussing energy prices/energy crisis and so on:

https://www.dosbods.co.uk/forum/29-energy-prices-new/

[THE SOUP DRAGON]

7 hours ago, sleepwello'nights said:

So far this years ISA alllocation is in the red after buying EVR and Poly. Do I double up and top them up a bit more. A gamble I know, but fantastic P/E ratios. .

My opinion on crypto is that it is too dependent on a fully functioning internet, more controls are looking to be exerted on it. 

The diversification has been a saviour. My PM allocation has increased as have my index linked bonds. 

My biggest worry is the future increase in electricity charges.

 

Runaway Council Tax charges are my biggest concern. 

[King Penda]

39 minutes ago, THE SOUP DRAGON said:

Runaway Council Tax charges are my biggest concern. 

Not for me if we get a government contribution which was muted I’m in the insane situation where they might owe me money theoretically obviously but even I started a thread on small house vs big house liability 

[invalid]

19 hours ago, wherebee said:

you know what pisses me off?  I haven't had Greggs in years, I live 12,000 miles away, but every time one of you fuckers mentions it, my mouth DEMANDS a steak bake.  Do they put crack in it or something?

 

 

Steak bake? That's way too hardcore for me man.

I'm still at the sausage roll level, the gateway snack.

 

[23rdian]

7 hours ago, sleepwello'nights said:

U.K. Inflation-Linked Gilt Index Fund - Gross Accumulation (vanguardinvestor.co.uk)

Thanks I actually had some of those for a while but wasn't sure I had the right thing so sold them.

[Democorruptcy]

2 hours ago, Castlevania said:

Oxxy during my period of ownership paid a quarterly dividend of US$0.01. I then paid 15% withholding tax on that. When the dividend hit my bank account I’d have around £2.50 from my 400 shares and I really wondered why they bothered. First Majestic also pay a dividend of next to nothing and again why bother?

On the subject of 'why bother', I was looking at the BATS "Transaction in Own Shares'. The lists of transactions involved went all the way down to a purchase of 1 share! They don't pay a transaction fee for that do they?

https://online.hl.co.uk/my-accounts/security_news/sedol/0287580

[23rdian]

5 hours ago, Democorruptcy said:

I've got a Tesco home delivery coming for £2.50 that would be a 40 mile round trip for me. Someone has to pick it, load it, drive it and then there's the van and fuel costs. It seems like tremendous value! I know in general Tesco are more expensive than some but there's always something on offer and the Aldi price matches.

If you do live in the sticks it's a bit of a no-brainer.

[Sasquatch]

4 hours ago, spunko said:

Just to let everyone know, there is a new subforum down here in the Basement, for discussing energy prices/energy crisis and so on:

https://www.dosbods.co.uk/forum/29-energy-prices-new/

Now you are just spoiling us with your subforum largesse.....

[Noallegiance]

Erm....

[christh]

10 hours ago, Harley said:

I asked about UTIP earlier and its high yield.  Any thoughts anyone?

I own it in one of my company pension funds. It did pretty well the 12 months to Jan 2022 I believe. Dunno what state it's in now but I don't bother even checking the annual statements usually. Definitely keeps me out of trouble.