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

[HousePriceMania]

42 minutes ago, jamtomorrow said:

I wonder how they will define "exceptional" in "exceptionally wealthy".

Unrelated: I really fancy me a boating accident. But must remember to take up boating at some point (before the accident, ideally)

That's what I was wondering.

Most Americans are exceptionally wealth compared to some regions of Asia.

[RJT1979]

10 minutes ago, Shamone said:

https://www.mardenherefordshire-pc.gov.uk/2020/03/11/updated-position-statement-about-phosphate-issue-in-river-lugg-catchment-area/

It’s worse than that around here. Moratorium on all building in huge swathes of the county. Private building projects thwarted because of farmers putting thousands of tonnes of chicken shit everywhere so this cuntry can have its vile factory £2 chicken.

What has chicken shit got to do with planning permission?

[Shamone]

6 minutes ago, RJT1979 said:

What has chicken shit got to do with planning permission?

Great question. The rivers Lugg and Wye are deteriorating because of phosphate run off from the industrial quantities of chicken shit spread on the land from the massive numerous chicken breeder sheds. Obviously, addressing the actual problem is too onerous so the solution has been to halt all building projects.

[CVG]

14 minutes ago, HousePriceMania said:

here's a question for everyone/

If you wanted to transfer £50K into another currency, which currency would you pick and what mechanism would you use transfer it ?

I'm thinking Norwegian ( mainly due to their IR rises that are in the pipeline ) and Swiss.

Could buy shares in companies or just get a forex account.

Bad shit is coming down the pipeline me thinks and I'd like to have some cash that's not dependent on the £.

Good question. I was pondering the best way to hold a sum in dollars if the exchange rate hit 2. I did look at Revolut (hold upto 30 currencies) but I understand that your money would not be protected.

[HousePriceMania]

1 minute ago, CVG said:

Good question. I was pondering the best way to hold a sum in dollars if the exchange rate hit 2. I did look at Revolut (hold upto 30 currencies) but I understand that your money would not be protected.

10% inflation per year, hardly protected

[Hancock]

24 minutes ago, HousePriceMania said:

here's a question for everyone/

If you wanted to transfer £50K into another currency, which currency would you pick and what mechanism would you use transfer it ?

I'm thinking Norwegian ( mainly due to their IR rises that are in the pipeline ) and Swiss.

Could buy shares in companies or just get a forex account.

Bad shit is coming down the pipeline me thinks and I'd like to have some cash that's not dependent on the £.

Gambling on short/mid term currency fluctuations isn't a great strategy imho.

Especially when interest rates rising in the UK is tipped to happen imminently and faster than the USD.

My mate Davey Hunter reckons South African rand is due a run, as people buy gold/silver/miners.

[DurhamBorn]

Im more worried about sterling going up mid term than down.Could be a big hit first of course.Iv added some assumptions into my roadmap around QE etc and im getting sterling over $1.70 .This isnt trading advice because there is more guessing than usual,but im seeing that as more likely than toast.

Of course its always prudent to spread risk,i tend to use sectors i like and buy companies spread across them.That tends to even things out over the mid term.

[HousePriceMania]

11 minutes ago, Hancock said:

Gambling on short/mid term currency fluctuations isn't a great strategy imho.

Especially when interest rates rising in the UK is tipped to happen imminently and faster than the USD.

My mate Davey Hunter reckons South African rand is due a run, as people buy gold/silver/miners.

Im not doing it to profit, it's a hedge against not being able to feed my children.

[HousePriceMania]

https://www.businessinsider.com/china-economy-xi-jinping-evergrande-debt-american-world-fallout-2021-10?r=US&IR=T

 

 

If China's economy keeps stumbling, it won't just take down Beijing — the whole world will collapse with it

[Plan-b]

4 minutes ago, HousePriceMania said:

Im not doing it to profit, it's a hedge against not being able to feed my children.

PMs as in UK coins (legal tender) perhaps?

[HousePriceMania]

15 minutes ago, Plan-b said:

PMs as in UK coins (legal tender) perhaps?

I have gold and silver at home for an emergency and I am thinking about buying into some of the miners.

I have a self imposed deadline of 2021 to decide what to do with any fiat that I have.

if the BoE raise rates Nov/Dec and say more is coming then I'll push that deadline out 6 months but for me and my family, it's got to the point when holding money in a UK bank is a bad idea.

[RJT1979]

56 minutes ago, Shamone said:

Great question. The rivers Lugg and Wye are deteriorating because of phosphate run off from the industrial quantities of chicken shit spread on the land from the massive numerous chicken breeder sheds. Obviously, addressing the actual problem is too onerous so the solution has been to halt all building projects.

Why halt building projects? Worried about further pollution?

[Hardhat]

Not sure if living wage is actually policy?

 

[Shamone]

8 minutes ago, RJT1979 said:

Why halt building projects? Worried about further pollution?

I can only surmise that the industry is connected to council policy in some way. Not sure how a couple moving from one house to a small self-built efficient house in the same county adds to river pollution. 

[JMD]

12 hours ago, sancho panza said:

I havea  friend who develops new build properties,jsut small plots  2 to 4 at a time.He works on one third land,one thrid build,one third profit/contingencies.His builds are generally good quality as I understand it as hes that sort of bloke.

It has never ceased to amaze me how much he pays for land.There's a lot to cut before they cut the price of bricks

so of the 300k he sells pads for currently,100k is building land.

Now he's not Barratts who are buying land cheaper on a larger scale but it does give an idea of how much costs can inflate before the cost of a hosue moves up.

Plus Barratts do 'land banking', i.e. they buy an asset (v large plots of land) and wait (20+ years) for the market (council) to come to them!... House builders are first and foremost land speculators i tell yer!!         

             I bang on about the above scenario because for me it exemplifies all that i fear/hate about big capitalism, corporatism, cronyism, etc.                                                                                                    (please excuse the following thread detour?) Adam Smith, described the functioning of perfect markets and warned of the dangers of big business, cartels, etc. I'm sure he would be spinning in his grave (btw, the 'adam smith' institute' of today shames his memory). Ok, that was 250 years ago, and Smith was a moral philosopher as much as he was an economist, however he did also recognise the crucial battle between capitol and labour (ie its not just a left-wing concept of Marx).... I know there's no near term solution for any of this, but maybe next cycle, or perhaps the cycle after next, some one will invent a fairer system of production, consumption and exchange.      

   

 

[JMD]

11 hours ago, DurhamBorn said:

This image from the twitter account,

 

Wow, is that a colorized photo from the USSR Gulag's!!!

[Noallegiance]

1 hour ago, DurhamBorn said:

Im more worried about sterling going up mid term than down.Could be a big hit first of course.Iv added some assumptions into my roadmap around QE etc and im getting sterling over $1.70 .This isnt trading advice because there is more guessing than usual,but im seeing that as more likely than toast.

Of course its always prudent to spread risk,i tend to use sectors i like and buy companies spread across them.That tends to even things out over the mid term.

Is that because of a hit to the dollar or perceived value in the £?

[DurhamBorn]

47 minutes ago, Hardhat said:

Not sure if living wage is actually policy?

 

"this increase in the living wage means an extra £1000 in workers pay packets equal to the Universal Credit uplift,helping people out of poverty through work and higher wages not welfare"

Something like that,ignoring the threshold freeze so £200 gone already + £100 NI,council tax another £75,if allowable earnings threshold in UC not increased another 60% gone (they  might lower UC clawback from 63% to 60%)

So about a 1.2% pay increase.

Of course they will likely increase UC by Septembers CPI so 3.1%,but still below inflation.

The above would slightly cut the UC bill for full time workers.

[DurhamBorn]

1 minute ago, Noallegiance said:

Is that because of a hit to the dollar or perceived value in the £?

Both,sterling looks like it might be the strongest big currency out of them all mid cycle.

I know that seems ludicrous,but thats what im seeing.It assumes QE going to £40bill or lower a year and a few other items.

It doesnt account for any slam down in a BK.

[Loki]

27 minutes ago, Cattle Prod said:

Can anyone recall the Act or mechanism or whatever that added 11 trillion dollars to M1 during the week of the 27tth April 2020?

Eleven Trillion Dollars.

Edit:

Maybe this?

https://fredblog.stlouisfed.org/2021/01/whats-behind-the-recent-surge-in-the-m1-money-supply/

So an accounting sleight of hand, basically making savings accounts checking accounts without the reserve requirement?

I vaguely remember that being covered here and it was as you describe 

[MrXxxx]

1 hour ago, JMD said:

Plus Barratts do 'land banking', i.e. they buy an asset (v large plots of land) and wait (20+ years) for the market (council) to come to them!... House builders are first and foremost land speculators i tell yer!! 

Agree, the fact that they can pour a slab and then maintain planning permission for an extensive period of time is wrong. I feel they should have a maximum of three years to complete [as per original permission granted] or their application/permission becomes 'null and void'. I know the local council can [if they want to] issue a completion notice after 12 months of the building start, but this is open to 'local' abuse i.e. having friends on the committee.

[MrXxxx]

13 hours ago, DurhamBorn said:

This image from the twitter account,

 

Given the choice I think I would take a mortgage out on the skip, at least you don't have to pay council tax!

[Heart's Ease]

Couple of anecdotes:

I've mentioned before about my coal/log supplier seeing price increases (50p) on a bag of coal, absorbing log increases etc. Saw him yesterday: next container loads to arrive have increased in price to him by £800 which he can't absorb and will pass on. He also mentioned another one of his customers who imports metal sanding discs from Ukraine. Cost of container full increased from £4kish to £18kish (!).

Butchers; cost of aluminium pie trays increased in one month by 50 percent. Tray seller says he's been offered more than current selling price for his entire tray stock. Supply lines of farm shop essentials  breaking down at wholesalers - with many lines unavailable (only got 3/15 at last visit). Other suppliers delivering reduced amounts eg ordered 42 boxes got 9 of chutney. Butcher has put his Christmas order sheet out for customers a month early as he's had so many requests for Christmas orders already. 

Interesting to hear from real business about what we've anticipated here for some time.

[Noallegiance]

31 minutes ago, Heart's Ease said:

Couple of anecdotes:

I've mentioned before about my coal/log supplier seeing price increases (50p) on a bag of coal, absorbing log increases etc. Saw him yesterday: next container loads to arrive have increased in price to him by £800 which he can't absorb and will pass on. He also mentioned another one of his customers who imports metal sanding discs from Ukraine. Cost of container full increased from £4kish to £18kish (!).

Butchers; cost of aluminium pie trays increased in one month by 50 percent. Tray seller says he's been offered more than current selling price for his entire tray stock. Supply lines of farm shop essentials  breaking down at wholesalers - with many lines unavailable (only got 3/15 at last visit). Other suppliers delivering reduced amounts eg ordered 42 boxes got 9 of chutney. Butcher has put his Christmas order sheet out for customers a month early as he's had so many requests for Christmas orders already. 

Interesting to hear from real business about what we've anticipated here for some time.

I feel like getting a t-shirt printed that says "Hands up who still thinks it was a good idea to shut the economy for a year?"

By the time I break it out next summer I reckon a lot of hands would stay down.

[Loki]

5 minutes ago, Noallegiance said:

I feel like getting a t-shirt printed that says "Hands up who still thinks it was a good idea to shut the economy for a year?"

By the time I break it out next summer I reckon a lot of hands would go up.

I love that