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

[invalid]

1 hour ago, Bricormortis said:

US markets getting stuffed. 

 

S & P up 65% over 5 years. FTSE 250 up 0.69% over 5 years.

The bigger they are the harder they fall?

 

 

 

 

 

 

[Castlevania]

2 hours ago, Bobthebuilder said:

They put a solar farm in a field, just outside a market town in Dorset probably about ten years ago, they are building houses on the site now.

As for farmland, I saw a 16 acre sloping field outside the same market town sell for £300,000 recently.

Is that because it now qualifies as brownfield land?

[M S E Refugee]

42 minutes ago, Cattle Prod said:

Mandatory solar panels are going to work great in Ireland, they might charge a smartphone now and then

Apparently there are around 235 million homes in the EU and each Solar Panel uses 20 grams of Silver, 24,000 metric tonnes were mined in 2021.

I would think the EU would probably need a whole years mined supply of Silver to achieve their aim.

Maybe JP Morgan could help them out, they have tons of Silver, allegedly.

[HousePriceMania]

1 hour ago, Bricormortis said:

Just under an ounce.

How much are 2nd hand panels 

[HousePriceMania]

1 hour ago, Bricormortis said:

US markets getting stuffed. 

Just had a look at apple. 

Its BK in tech stocks

Get your shorts in while you can. 

 

[HousePriceMania]

33 minutes ago, Froggy2000 said:

I looked into this a few years ago, partly as a result of this thread. One concern I had was agriculture in the UK is subsidised by CAP and as you say also has speculative premium due to planning permission potential. Its not unfortunately quite the pure play on agriculture you would hope it would be.

Having said that, have you looked at woodland? Its still an inflation hedge and you can really enjoy it with family etc for not much money. Especially important if normal holidays become out of reach etc. Can buy it with a SIPP too.

Dogs, houses and woodland all suffered lockdown bubbles. give it 6 months 

[DurhamBorn]

2 hours ago, HousePriceMania said:

 

We are.Look at Verizon and T on that chart and baccy 

[Axeman123]

55 minutes ago, Cattle Prod said:

Mandatory solar panels are going to work great in Ireland, they might charge a smartphone now and then

They need waterwheels on every guttering downpipe on the west coast instead!

[Chewing Grass]

19 minutes ago, M S E Refugee said:

Apparently there are around 235 million homes in the EU and each Solar Panel uses 20 grams of Silver, 24,000 metric tonnes were mined in 2021.

I would think the EU would probably need a whole years mined supply of Silver to achieve their aim.

Maybe JP Morgan could help them out, they have tons of Silver, allegedly.

The electricity supply system used to be dead simple, now they are turning it into an expensive, high tech, interlinked, cpu and internet driven mess.

[DurhamBorn]

1 hour ago, Bobthebuilder said:

The fact that you shared this on HPC and then moving over to here, shows your character. Working class folk, helping out the small man. You could have gone the Youtube video way and made a name for yourself, again you didnt.

Maybe you should have gone into politics, and I mean that. Its hard to make a difference, but "you never know, what's gonna happen".

Someone is gonna write a book about you someday.

I did.My dad was Mayor,i was an elected councillor.I gave it up because you couldnt do anything.Labour councillors backed officers at the council every time.Cushy numbers all around.I was the only one on the council who refused to take the allowance.Plenty of retired teachers etc on big pensions still took it,Labour of course.I said i refuse to take money from low paid workers being fleeced with council tax.I beat Labour in a seat they had never lost,nobody even got close before,i won by 1 vote,they had to count them three times 

[Castlevania]

22 minutes ago, DurhamBorn said:

We are.Look at Verizon and T on that chart and baccy 

Yeah it’s all good, but I want them to fall back so that I can complete what I started.

[Castlevania]

15 minutes ago, DurhamBorn said:

I did.My dad was Mayor,i was an elected councillor.I gave it up because you couldnt do anything.Labour councillors backed officers at the council every time.Cushy numbers all around.I was the only one on the council who refused to take the allowance.Plenty of retired teachers etc on big pensions still took it,Labour of course.I said i refuse to take money from low paid workers being fleeced with council tax.I beat Labour in a seat they had never lost,nobody even got close before,i won by 1 vote,they had to count them three times 

What did you run as?

[Castlevania]

Elon’s having a moan

It’s good to see that Exxon is in the top 2%

 

[Bobthebuilder]

1 hour ago, Castlevania said:

Is that because it now qualifies as brownfield land?

Looks like that to me. Moved half the solar farm down a field, then hey presto the houses started going up. Opposite side to the bypass, first on that side since 1984, a precedent set to continue I think.

[jamtomorrow]

You can see this being upheld by SCOTUS. Bye-bye SEC?

 

[DurhamBorn]

1 hour ago, Castlevania said:

What did you run as?

Libdem, when they were actually sane, like policies to increase tax free allowance.Woke has destroyed them now.

[sancho panza]

Here they come...someone else who having served as BoE Governor for two terms pretending as if the current mess is nothing to do with his tenure.....

'Nothing to do with me........'....

 

These problems have been a long time coming

Bank of England has made 'serious mistakes', former Governor says (telegraph.co.uk)

'Bank of England has made 'serious mistakes', former Governor says

Lord King warns that Covid money-printing spree and low interest rates were major errors

[JMD]

6 hours ago, belfastchild said:

Thats going to be a massive investment in grid infrastructure. Go long copper!
Most existing grid connections to houses can only really cope with 1 or 2 sets of solar panels per string. I overloaded my local string a few years ago on peak output day when I was on holiday. No working from home then so nowhere for the extra power to go, voltage went up etc.
Unless they mean one solar panel per house, have seen that on some newbuild estates in England.

Thats of course if they have thought of the practicalities.

Yes, I think Rick Rule (pretty certain it was him) said recently to invest in copper, plus the local-grid-battery (I don't know their technical name) manufacturers and the commods to make these type of batteries. He was dismissive of EV batteries because electric cars won't sell in huge numbers, but unfortunately didn't elaborate much on the local grid batteries. The problem you cite is apparently solved by using such a type of shared local battery system.                                                                                                                                                  Does anyone on the thread know about these batteries (they differ from an EV battery), the commods they require, and the likely manufacturers that will build them? If the entire EU population is mandated to use this tech it would be great to know more about it/how to invest in it.

[JMD]

6 hours ago, leonardratso said:

Im just turning up my air con and central heating and leaving every light and electrical device on 24/7.

I dont expect anyone round to arrest/shoot me, the bills will be through the roof, but thats my middle finger up to the govt, could do a runner i suppose.

I understand that non-doms can elect to pay their energy bills in a basket of currencies of their choice; I believe Mrs Sunak tenders hers mostly in rubles and rupees...   Of course I have just made all that stuff up - but admit it, if tomorrow's Sun front page carried this story - no one on here would blink an eyelid or be the tiniest bit shocked?!?  Clown World indeed.

[AWW]

2 hours ago, DurhamBorn said:

Libdem, when they were actually sane, like policies to increase tax free allowance.Woke has destroyed them now.

I remember being so optimistic for the LD/CON coalition back in 2010. Liberal social policy with good economic stewardship. Look how that turned out. I can't see how I'll do anything other than spoil ballots now.

[wherebee]

40 minutes ago, AWW said:

I remember being so optimistic for the LD/CON coalition back in 2010. Liberal social policy with good economic stewardship. Look how that turned out. I can't see how I'll do anything other than spoil ballots now.

i voted Libdem a long time ago when still in the UK - but as soon as that cunt Clegg took over, I knew he was a soyboy and they were done for.

[WICAO]

7 hours ago, DurhamBorn said:

Rolling 12 months Vanguard 60/40 with IFA fees will be down 1.7%.Anyone in drawdown taking 5% as most with IFAs do will have a fund down 6.7%,17% down inflation adjusted.

Now anyone not in drawdown its not a disaster of course,at least nominal,but these funds are the backbone of drawdown and have not been tested in a sustained downturn.Even now those in drawdown are going into year two with 6.7% less.So unless they increase the % they draw their income will be down 17% this year compared to last.

If we take £100k drawing £4k a year on the above -1.7%pa after 8 years you have £50k left.At inflation of 6%pa over those 8 years you would need to be drawing £6500 at the end to maintain spending power.About 6 years money left.

I see no way how the government can increase state workers pensions by inflation while this is whats likely in the private sector.

I think this inflation is going to rip away peoples retirements,then their houses as they Equity release to try to make it through.

There is pretty much zero incentive to work for most people unless its for the state.BOE getting the flak ensures monetising gilts is over.Government is trapped in a disaster.

Running a backtest of historic sequence of returns (using US data which has been one of the best performing markets historically so biases elsewhere will likely be worse) always reveals some interesting things including playing your story out.

To make the maths round/easy let's assume £1M pot, 60% equities : 35% bonds : 5% cash (so a crude 60:40 portfolio), 5% drawdown, 0.25% fees on equities/bonds (so not with a typical IFA which will make it all worse as you highlight), 30 year retirement and rebalanced annually.

It shows a 5% drawdown has sequence of return failures in a third of all sequences.  5% is just too high a drawdown.  Do you know of any IFA's actually getting the punters to do this?

In FIRE land the '4% Rule' is talked about often so let's change the drawdown to 3.75% which would be circa 4% with fees.  Now our failures are down to 'just 4%' but what's interesting are the start years - 1965, 1966, 1967, 1968 and 1969.  Weren't they start years where periods of high inflation occurred early in the sequence?  Wasn't the Great Inflation considered to have started in 1965...  The great depression was bad but the inflation years were worse from a sequence of returns perspective.

As you highlight inflation is a real risk for sequence of returns.

Now any prudent (IMHO) FIRE'ee is not even at these levels and/or has some sort of back up plans.  Personally, I've gone with a max 2.5% drawdown (and I'm now not even at that, if I was drawing down it would now be 1.8%).  Drawdown at 2.5% + those 0.25% fees and all of a sudden historic success is 100% and with the worst case sequence that £1M is now £620k inflation adjusted after 30 years.

30 years of retirement and worst case still 62% of my wealth inflation adjusted remaining.  I'd take that.

Given I intend to live for a while longer let's change that 30 years to 40 years.  This helps the story and now I have worst case 84% remaining.

This is why I worked a bit longer and have learnt to live very well on little.  Reduce drawdown % including fees and taxes and all of a sudden you don't have to be an investing genius.  The market will do.

For anyone interested in more here's a simple tool https://ficalc.app/

Of course lots of DYOR in there and what would I know...  After all I'm not an IFA...

[WICAO]

Oh and I should have added.

I've also never considered the State Pension but if it all goes horribly wrong as a further back up:

• I have the UK State Pension which might just get me out of the sh*t but it won't be 'triple locked' here in Australia so will be eroded by inflation; and
• The Australia State Pension which is means tested

Provided of course they still exist.  But how far do you go.  I'm also wasting my life doing a meaningless job and might just have a heart attack because of that shit show.

Living life is a risk and we all have a different risk tolerance.

[WICAO]

7 hours ago, Pip321 said:

Just seen agricultural farm land in Malton (North Yorkshire) to be used as solar panels. Objections by locals perhaps for all the wrong reasons….but why on earth would we want less productive wheat growing farm land at the moment. Its a wheat growing area on excellent agricultural land…I am sure there are letter places to stick panels ie factory roofs etc  

You couldn’t make this shite up.

As an aside….thoughts on buying farmland? I am having a look and wonder if it’s the best hedge of all? I wouldn’t farm it myself but let one of the massive tenant agricultural farmers use it. 

Good for intergenerational transfer of wealth as no inheritance tax in some cases as I understand it.

[WICAO]

5 hours ago, sancho panza said:

Looks like Comrade Ardern is begining to taste the bile.The left wing meeja obviously blame Brexit/Russia/cost of living crisis but likely the young opting not to live under a Maoist regime

It would be ironic if the debt deflation kicked off in a far flung margin of the world economy and not one of the big ones,but the Bank Of New Zealand did invent the 2% inflation target.......jsut sayin'''

Priti should get on the phone and do a deal...life under (name of tinpot African Dictator) or Ardern??Should stop the rot.

 

 

Young people leaving New Zealand in droves amid worsening cost of living (msn.com)

New Zealand has reported a net loss of migrants for the second year in a row as more residents decided to leave the country amid the rising cost of living.

About 7,300 more people left the country in the year ending March 2022 than those choosing to build a life in New Zealand, according to figures recently released by Stats NZ, the country’s official data agency.

Last year, it recorded a net loss of 1,700 people, making it the lowest net migration since 2012. In 2020, the country saw a record net gain of 91,700.

“Migrant arrivals have dropped to levels seen in the mid-1980s,” said Statistics New Zealand’s population indicator manager Tehseen Islam as he blamed the record dip on Covid-19-related travel and border restrictions.

With the country dealing with high inflation of 6.9 per cent and tough economic conditions driven by high living costs, New Zealand residents are heading off overseas in droves.

The provisional loss of residents is largely driven by non-citizens, as about 33,300 left the border, while just 23,900 arrived, leading to a net loss of 9,400. For the same period, about 22,200 citizens returned to the country, while 20,100 went overseas leading to a net gain of 2,100.

The increase in migration was especially observed among young adults between 18 to 27 years, with about 1,800 citizens belonging to this age group leaving the country. With the unemployment rate at 3.2 per cent, economists fear that the loss of workforce could contribute to labour shortage in the country.

“It’s a huge reversal – and the first time we’ve seen those negative figures since the global financial crisis, the Christchurch earthquakes and the Australian mining boom all combined in the early 2010s,” Brad Oslen, Infometrics principal economist and director, told The Guardian.

“The difficulty finding workers is extreme around the country – you have a smaller working age population than the year before, at a time when everyone is desperately calling out for workers. [It] really just exacerbates the pressures that businesses are under.”

Meanwhile, the opposition Act Party slammed Labour for their Covid-19 policy.

“Labour’s chickens have come home to roost. By locking the economy down and borrowing $50bn, they have left us with a mountain of debt and rising prices. Kiwis are finding it difficult to make ends meet and are heading offshore for a better chance of getting ahead in life,” said the leader of the party, David Seymour.

“Now we’re seeing changes at the border but it’s too little too late, we’ve already gained the reputation of a hermit kingdom overseas and are becoming less and less attractive as a destination.”

Earlier in May, New Zealand opened its borders to visitors for the first time since the pandemic started as it moved away from its “zero Covid” policy that was enforced through rigorous test-and-trace programmes, accepting that it became unsustainable with the spread of the highly infectious Delta and then Omicron variants.

Prime minister Jacinda Ardern announced in October last year that the strategy of completely keeping out or eradicating Covid would be “phased out”, and subsequently began easing restrictions once around 80 per cent of the country’s five million population were fully vaccinated.

From news to politics, travel to sport, culture to climate – The Independent has a host of free newsletters to suit your interests. To find the stories you want to read, and more, in your inbox, click here.

 

Insane house prices or if you know someone with land maybe a tiny house or head somewhere else seem to be the choices for the young in NZ.

Not sure why the TPTB haven't figured it out.  Oh, that's right.  It suits them not to.