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

[sancho panza]

12 hours ago, Cattle Prod said:

I'm wrestling with this too. I don't trust most of the ETFs, but for my SIPP I have no choice so I go with Sprott. Seems to be unallocated, they issue serial numbers, and you can withdraw the physical (if your holding is reasonably big).

I'm going through the thought experiment of "what will happen in a gold revaluation event". This might seem like pie in the sky, but it has happened before, and the time for it happening again is getting closer imo.

My thinking is:

- Paper gold will obviously not benefit. It'll be like a company issuing a ton of equity and your holding just gets massively diluted.

- Physical gold in your possesion - fine

- Sprott physical gold - should be fine? 

One I'm struggling with is miners as a proxy for physical gold. I know they have all sorts of other risks, but what happens to their value if gold gets revalued? I mean they do own physical gold, in the ground, and it suddenly goes way above their AISC. Of course the ones hedged won't benefit, unless all the paper shorts get diluted with the paper longs. Did paper gold exist last time gold was revalued? Probably not, what a mess it is. What about streaming companies like WPM I wonder...

Short answer is physical gold in posession, but that doesn't help my SIPP allocation!

Ref the miners,I look at it this way,they are the vehicle that dodgy politicians will use to get money out.

Your average basement dwellers thinks in terms of phsyical gold and owning more than we can carry is beyond our means.For people who lead govts,given the scale of the the gold they need to carry with them is beyond a suitcase,they need equities.

AS you say they leverage to the price nicely and having watched Zimbabwean and South African miners of yaers,the politicians generally are well aware of how innefieicnt the digging will get.

There have been periods historically of wide scale nationalisation but they generally end up as some sort of private public partenrship ie the miners dig the stuff up,the pols tax the divi and own shares

Interesting that during the 30's ban the miners were the only trade.

I msut say tho, a big driver of our spray n pray on the sector is geogrpahical spread and focusing particualrly on US/Canada(ahtouhg witnessing Trudeau this last year he's more htird world than Old Bob himsef)

Edited May 13 by sancho panza

[sancho panza]

8 hours ago, kibuc said:

I don't want to step into the territory of providing advice as I have neither the qualifications nor the track record required. I've used that recent drop to narrow down my portfolio from 17 all the way to 10, with 2 still in the why-do-I-hold-such-garbage, looks-mediocre-but-reacts-to-silver-spot-like-a-rabbit-on-extasy category, while the remaining 8 passin at least the initial check, from medium to very high conviction. I think if you look back at my posts you'll be able to see at least some of those names and an explaination why I like them.

It's always dyor on here K.We all know that.Gets said enough as well.

Must say I always appreciate your insights as you're one of the more informed mining tradesr on hre and I jsut use the titbits I pick up to do my own research and set my trades as I jsut don't have that understanding of the ming sector

Intersting to see things like Abra up 15% at one point today.Alexco got a nice 6% bounce too.

We picked up some more DSV,Abra,NGD,BVN(dog poo sandwich but very cheap dog poo sandwich imho),HOC,SMD today striaght out of the traps,also some Anglogold and kinross calls.Looking to add more Monday I suspectBeena heack of a week for miners all in.

Edited May 13 by sancho panza

[Transistor Man]

2 hours ago, JMD said:

CP, that makes me recall an interview I once saw with a Russian geologist, where he said that Russia created underground oil or gas (can't remember which) storage caverns using small nuclear bombs. The heat of the explosion also sealed the chamber, 

The projects were called “Nuclear Explosions for the National Economy”!

All together, the Program 7 conducted 115 nuclear explosions. Among them:

39 explosions for the purpose of geological exploration (trying to find new natural gasdeposits by studying seismic waves produced by small nuclear explosions)

25 explosions for intensification of oil and gas debits

22 explosions for creating underground storage for natural gas

5 explosions for extinguishing large natural gas fountains that were burning[3]

4 explosions for creating channels and dams (including the Chagan test in Kazakhstan, and the Taiga test on the potential route of the Pechora–Kama Canal)

2 explosions for crushing ore in open-pit mines

2 explosions for creating underground storage for toxic wastes

1 explosion to facilitate coal mining in an underground mine

19 explosions were performed for research purposes (studying possible migration of the radioactivity from the place of the explosions).

https://en.m.wikipedia.org/wiki/Nuclear_Explosions_for_the_National_Economy

 

Crazy stuff. 

[jamtomorrow]

9 hours ago, Cattle Prod said:

Thanks. Do any of the big providers give access, do you know?

I don't - I had a quick look at some larger providers (can't remember which for definite) but the carrying costs were just too much for the amount I had.

When I did eventually find a smaller provider where the costs made sense, I got the distinct impression I was their first PM punter. Didn't bother me one bit though - as long as the SIPP wrapper is properly constituted and they don't fat-finger the purchase, I'm happy.

At the time they didn't give out the BV account credentials, but I was able to verify the holding via the nickname on the account and the BV daily audit.

Latterly (and presumably because they've picked up more PM customers and have had to get their act together) they've started providing credentials so you can execute your own trades. You just have to sign an undertaking to say you won't touch anything but gold.

*Vaguely* recall AJ Bell was on my original list. And there's a list of providers on the BV site, do any of those qualify as "big"?

https://www.bullionvault.com/info/gold-sipp-pension-plan

The SIPP administrators who wrap your gold investment are FCA regulated financial businesses which are independent of BullionVault. Several SIPP providers enable their clients to buy through BullionVault. Get in touch with your own provider or one of the providers below to take the next step.

• Mattioli Woods
• Hornbuckle
• Barnett Waddingham
• Killik & Co
• James Hay Partnership
• Suffolk Life/Curtis Banks
• Rowanmoor

[Lightscribe]

Just in case anyone hasn’t got the gist over the last two years on how the governments work yet. 

They all have the same narrative and agenda to work to (albeit health, economic etc), it’s just the approach they take to sell it to their own public.

Here in the UK, we have a conservative government that by its fundamentals has to look as if it’s defending against this kind of thing. In order to give that illusion it has to favour the ‘good cop bad cop’ routine.

For example:

A bit more socialism (WEF stepping stone) gets planned to be implemented (US Dems leading the way).

Boris/Rishi/Javid laughs it off and says it’s not going to happen in the UK.

The rest of the government represents ‘the people’ and says this is what the public want whilst using the media as a tool to whip up anger in the NPCs. (People that can’t think for themselves)

Look at those oily rich evil investor bastards, with all their wind energy and hydrogen investment. My maccy-Ds Big Mac meal has gone up to £6.50! 

Boris/Rishi/Javid then does a u-turn and implements it anyway. It was what the public demanded after all.

https://www.dailymail.co.uk/news/article-10762487/amp/Rishi-Sunak-hints-U-turn-windfall-tax-energy-firms-months-dismissing-Labour-levy.html

[feed]

 

 

[DurhamBorn]

14 minutes ago, Lightscribe said:

Just in case anyone hasn’t got the gist over the last two years on how the governments work yet. 

They all have the same narrative and agenda to work to (albeit health, economic etc), it’s just the approach they take to sell it to their own public.

Here in the UK, we have a conservative government that by its fundamentals has to look as if it’s defending against this kind of thing. In order to give that illusion it has to favour the ‘good cop bad cop’ routine.

For example:

A bit more socialism (WEF stepping stone) gets planned to be implemented (US Dems leading the way).

Boris/Rishi/Javid laughs it off and says it’s not going to happen in the UK.

The rest of the government represents ‘the people’ and says this is what the public want whilst using the media as a tool to whip up anger in the NPCs. (People that can’t think for themselves)

Look at those oily rich evil investor bastards, with all their wind energy and hydrogen investment. My maccy-Ds Big Mac meal has gone up to £6.50! 

Boris/Rishi/Javid then does a u-turn and implements it anyway. It was what the public demanded after all.

https://www.dailymail.co.uk/news/article-10762487/amp/Rishi-Sunak-hints-U-turn-windfall-tax-energy-firms-months-dismissing-Labour-levy.html

Like that tosser from Tesco.Multi-millionaire silver spoon type wants to steal my capital yet i come from and most of my family still live in the poorest town in England.Maybe if he wants to steal from my family i should go and kick the shite out of him and help myself to his property?.Where are the government ministers showing most of BPs divis go into poor peoples pensions,and a lot of middle England?.Well until that bitch from NEST sold them all at £2.

Of course no mention of the massive fees rich landowners get for sticking windmills on their land not fit for anything else,paid for with huge levies on electric bills

Edited May 14 by DurhamBorn

[Sasquatch]

56 minutes ago, jamtomorrow said:

I don't - I had a quick look at some larger providers (can't remember which for definite) but the carrying costs were just too much for the amount I had.

When I did eventually find a smaller provider where the costs made sense, I got the distinct impression I was their first PM punter. Didn't bother me one bit though - as long as the SIPP wrapper is properly constituted and they don't fat-finger the purchase, I'm happy.

At the time they didn't give out the BV account credentials, but I was able to verify the holding via the nickname on the account and the BV daily audit.

Latterly (and presumably because they've picked up more PM customers and have had to get their act together) they've started providing credentials so you can execute your own trades. You just have to sign an undertaking to say you won't touch anything but gold.

*Vaguely* recall AJ Bell was on my original list. And there's a list of providers on the BV site, do any of those qualify as "big"?

https://www.bullionvault.com/info/gold-sipp-pension-plan

The SIPP administrators who wrap your gold investment are FCA regulated financial businesses which are independent of BullionVault. Several SIPP providers enable their clients to buy through BullionVault. Get in touch with your own provider or one of the providers below to take the next step.

• Mattioli Woods
• Hornbuckle
• Barnett Waddingham
• Killik & Co
• James Hay Partnership
• Suffolk Life/Curtis Banks
• Rowanmoor

 

I use BV via James Hay. Seems to work ok but there is a time lag because James Hay handle the transactions. I can't buy and sell directly from BV. The only downside of using James Hay is that I've been forced to use Selftrade (EQi) for stocks. It's quite a poor platform.

[Ash4781b]

A Big Mac meal is £6.50. Blimey.
 

As an aside I had a tea and cooked breakfast (2x eggs, 2x sausage,2x mushroom,tomato and toast) in the local Sainsburys for around the same price. I know Sainsburys are removing and restructuring the cafe offers (some already the pre packed stuff in the coffee chains and airports). They had 4x staff on shift too. 

[M S E Refugee]

I like Rafi's description of Hyperinflation as being Hyper-deflation of the currency versus real things such as Gold.

[Jesus Wept]

Aberdeen PLC trading at a 13 year low of around 190p. (4% jump on Friday). 

Using Recent yield as a guide that would put it at about 6.5% annual yield. 

One to put in the kids ISA alongside their BATs, VOD, HFEL, GSK as long term (20 year +++) dividend yield? Could use the profits / capital from their Enbridge which I cashed in recently or dip into this years annual £9k allowance? (I was hoping to have a little dry tinder - in their accounts) in case the BK materialises. 
 

In terms of asset managers I am also holding MNG - bought last year - which has remained fairly flat but returns a nice 8% dividend.

Here is the ABDN history. 570p high back in June 2015. Looks historically cheap. 

@DurhamBorn

I know you’ve been talking asset managers and insurance recently. Not sure how confident I am that they’ll not be massacred further in a Stockmarket rout / stagflation / recession / depression environment.

Your thoughts as always appreciated - never taken as a buy recommendation - just want to look into your reasoning further .

Need something to go alongside my telecoms. 

Anyway off to garden and beekeep…. cracking morning here in the sunny NE….

 

 

[sancho panza]

India bans wheat exports.what food crisis?

https://www.telegraph.co.uk/business/2022/05/14/india-bans-wheat-exports-deepen-global-food-crisis/

[DurhamBorn]

2 minutes ago, Jesus Wept said:

Aberdeen PLC trading at a 13 year low of around 190p. (4% jump on Friday). 

Using Recent yield as a guide that would put it at about 6.5% annual yield. 

One to put in the kids ISA alongside their BATs, VOD, HFEL, GSK as long term (20 year +++) dividend yield? Could use the profits / capital from their Enbridge which I cashed in recently or dip into this years annual £9k allowance? (I was hoping to have a little dry tinder - in their accounts) in case the BK materialises. 
 

In terms of asset managers I am also holding MNG - bought last year - which has remained fairly flat but returns a nice 8% dividend.

Here is the ABDN history. 570p high back in June 2015. Looks historically cheap. 

@DurhamBorn

I know you’ve been talking asset managers and insurance recently. Not sure how confident I am that they’ll not be massacred further in a Stockmarket rout / stagflation / recession / depression environment.

Your thoughts as always appreciated - never taken as a buy recommendation - just want to look into your reasoning further .

Need something to go alongside my telecoms. 

Anyway off to garden and beekeep…. cracking morning here in the sunny NE….

 

 

Iv been buying Abrdn and Hargreaves when it went to £8.50 (and £8.16 the other day).I own M+G already.Slightly different reasons on them all,but i suspect a lot of housing wealth will be coming out and going their way.They do have a pull of people drawing down assets though against them.They arent as plain sailing as oil was etc.Wages increases with inflation means higher pension savings as well.Hargreaves also gains from higher rates when they hold client cash.They also have low overheads so inflation doesnt hurt them directly.

I suspect they would get hit more in a BK,but i dont care.I have ladders set below.I dont concern myself worrying too much.Im not scared of being down in short or medium term.I do think Abrdn management need to get the £300 mill buyback going though,pissing around waiting when shares are sub £2 smacks of eye off the ball.

 

[kibuc]

10 hours ago, sancho panza said:

It's always dyor on here K.We all know that.Gets said enough as well.

Must say I always appreciate your insights as you're one of the more informed mining tradesr on hre and I jsut use the titbits I pick up to do my own research and set my trades as I jsut don't have that understanding of the ming sector

Intersting to see things like Abra up 15% at one point today.Alexco got a nice 6% bounce too.

We picked up some more DSV,Abra,NGD,BVN(dog poo sandwich but very cheap dog poo sandwich imho),HOC,SMD today striaght out of the traps,also some Anglogold and kinross calls.Looking to add more Monday I suspectBeena heack of a week for miners all in.

 

Haha, you're right, I guess I'm a bit defensive right now as for all the tough talk about picking undervalued explorers and rinding them to the moon, this recent carnage left my portfolio dead flat compared to 2018 while more diverse portfolios of DB and the like made a killing, so I don't feel like I'm in a position to preach

I'm on my way to California* for the weekend so I'll provide a review of my portfolio today or tomorrow.

*the one in Norfolk.

[Chewing Grass]

Logged onto Big Mr Pension Co this morning and was greeted by another you are not on target warning, so had a look.

Retirement date was 60-60.5 last year, slipped to 62 in Feb and 64 in April factoring 'a bit of inflation in', as of today its 65.

So two years of Covid and a few months of sword rattling has robbed me (potentially) of 5 years modest retirement.

I wish more people would wake up and realise what these cunts are doing to them.

[Pip321]

1 hour ago, DurhamBorn said:

Iv been buying Abrdn and Hargreaves when it went to £8.50 (and £8.16 the other day).I own M+G already.Slightly different reasons on them all,but i suspect a lot of housing wealth will be coming out and going their way.They do have a pull of people drawing down assets though against them.They arent as plain sailing as oil was etc.Wages increases with inflation means higher pension savings as well.Hargreaves also gains from higher rates when they hold client cash.They also have low overheads so inflation doesnt hurt them directly.

I suspect they would get hit more in a BK,but i dont care.I have ladders set below.I dont concern myself worrying too much.Im not scared of being down in short or medium term.I do think Abrdn management need to get the £300 mill buyback going though,pissing around waiting when shares are sub £2 smacks of eye off the ball.

 

I bought HL. and ABDN last week but relatively light. I imagined you just copied my sage advice 😆😆 (in the absence of any doubt as sometime occurs in the written word…..that is meant a pure self deprecating humour against my naive novice experience😉) 

One reason was I remember Warren Buffet explaining how the shares in assets managers and insurers often do better than the funds they manage particularly if you add in dividends. My Aberdeen PEP (ISA) according to their prospectus has doubled in 10 years….but the reality is with a 1.2% fund charge and a 0.35% ISA wrapper fee my return was less than 50% and that included accumulated divis. So since selling the fund last week the fund dropped 5% and the shares I bought have gone up 5%….a bit more dramatic start than I expected but feels like a nice deal and a long term hold. HL. And Abdn added together have become one of my ‘share holdings’ and not really enough to trade if they rise and dip so a nice long term hold to smash my cash.  

I am still on a journey…likely will compromise with my big old expensive with profits type Pru SIPP and move some out temporarily into cash and some into more cost effective and reactive funds ready for any BK. That will mean the Pru funds isn’t ideal but it will only then be about 15% of my assets….so part of the picture. 

And I am greedily setting quite low ladders on some stuff. Emotionally I already own Rio, BAT (or IMB), BP etc…but no rush to buy and a couple of ‘bad market days’ and I will be close.  

The massive difference this thread has made is that if there was a crash I know exactly what I would do….whereas in March 2020 I knew what I should do but didn’t know where to start. In the meantime I am ‘invested’ but playing round the edges and learning as much about the emotional sentiment side as I am about the financial fundamentals.

Thx 👍🏻😉

[Chewing Grass]

2 hours ago, sancho panza said:

India bans wheat exports.what food crisis?

https://www.telegraph.co.uk/business/2022/05/14/india-bans-wheat-exports-deepen-global-food-crisis/

Stocking up on Basmati Rice now then.

[Lightscribe]

3 hours ago, Ash4781b said:

A Big Mac meal is £6.50. Blimey.
 

As an aside I had a tea and cooked breakfast (2x eggs, 2x sausage,2x mushroom,tomato and toast) in the local Sainsburys for around the same price. I know Sainsburys are removing and restructuring the cafe offers (some already the pre packed stuff in the coffee chains and airports). They had 4x staff on shift too. 

Grand Big Mac meal is £6.39 or £6.89 with bacon.

Normal Big Mac meal £5.19 which is ridiculous considering you can still get those £1.99 vouchers for one without the drink. Although now these vouchers are franchise specific so I’ve heard that some branches are refusing them.

This is the inflation metric to watch IMO, sounds silly but a packet of pasta from 20p to 40p doesn’t really register on the average bennie radar. Calling in dinner for four from Maccy Ds on Uber eats going up by 50% very definitely does.

Edited May 14 by Lightscribe

[Jesus Wept]

32 minutes ago, Lightscribe said:

Grand Big Mac meal is £6.39 or £6.89 with bacon.

Normal Big Mac meal £5.19 which is ridiculous considering you can still get those £1.99 vouchers for one without the drink. Although now these vouchers are franchise specific so I’ve heard that some branches are refusing them.

This is the inflation metric to watch IMO, sounds silly but a packet of pasta from 20p to 40p doesn’t really register on the average bennie radar. Calling in dinner for four from Maccy Ds on Uber eats going up by 50% very definitely does.

I wouldn’t eat that shit if you paid me £6.89 for every burger I ate. 
 

(I get your point though. The BM index is a good way of checking on strength of currencies abroad as well relative to the pound). 

[M S E Refugee]

34 minutes ago, Lightscribe said:

Grand Big Mac meal is £6.39 or £6.89 with bacon.

Normal Big Mac meal £5.19 which is ridiculous considering you can still get those £1.99 vouchers for one without the drink. Although now these vouchers are franchise specific so I’ve heard that some branches are refusing them.

This is the inflation metric to watch IMO, sounds silly but a packet of pasta from 20p to 40p doesn’t really register on the average bennie radar. Calling in dinner for four from Maccy Ds on Uber eats going up by 50% very definitely does.

This what we are up against, many people in the UK are beyond pathetic.

every grillin' dude

3 hours ago

That’s a myth. Healthy meals are just as cheap as unhealthy ones. The difference is that they take time to make. Poor people are oftentimes too tired or depressed to take the time to make healthy meals.

[Joncrete Cungle]

2 minutes ago, M S E Refugee said:

This what we are up against, many people in the UK are beyond pathetic.

every grillin' dude

3 hours ago

That’s a myth. Healthy meals are just as cheap as unhealthy ones. The difference is that they take time to make. Poor people are oftentimes too tired or depressed to take the time to make healthy meals.

I enjoy pointing out that people who work 0 hours per week or 16 hours per week have a fucking shit ton of time for such things.

[JMD]

13 hours ago, Transistor Man said:

The projects were called “Nuclear Explosions for the National Economy”!

All together, the Program 7 conducted 115 nuclear explosions. Among them:

39 explosions for the purpose of geological exploration (trying to find new natural gasdeposits by studying seismic waves produced by small nuclear explosions)

25 explosions for intensification of oil and gas debits

22 explosions for creating underground storage for natural gas

5 explosions for extinguishing large natural gas fountains that were burning[3]

4 explosions for creating channels and dams (including the Chagan test in Kazakhstan, and the Taiga test on the potential route of the Pechora–Kama Canal)

2 explosions for crushing ore in open-pit mines

2 explosions for creating underground storage for toxic wastes

1 explosion to facilitate coal mining in an underground mine

19 explosions were performed for research purposes (studying possible migration of the radioactivity from the place of the explosions).

https://en.m.wikipedia.org/wiki/Nuclear_Explosions_for_the_National_Economy

 

Crazy stuff. 

Yes, all that sounds crazy to us today. Plus I note the US had a similar program called Ploughshare which explored utilising nuclear bombs for doing construction projects, dams, etc - so if that work had gone ahead it would have been above ground and very visible/not secret, I bet that would have involved quiet a PR exercise?!                                                                                                                                                                                Anyway all this does make me fearful that Russia (and it's 'casual nuclear attitude') could actually resort to using tactical nuclear weapons in Ukraine 'if forced to'. Much comment and rumour of Russia doing this in past week's, which I initially kinda dismissed, however I now think there is a real possibility they might!                               ...and really rams home that we have entered a new geopolitical world - but rather curiously, mainly because of the illuminating discussions on here - I am more scared of the potential secret plans and future intentions, or just plain stupidity, of our own Western governments than I am of Putin?!?

Edited May 14 by JMD

[M S E Refugee]

Things are going to be dire this Winter and despite my warnings to my friends I am met with "la la la" fingers in the ears.

 

[janch]

Somehow this news has passed me by but Bill Gates is seriously involved in research for nuclear fusion.  There was a small article in last week's Mail on Sunday which I can't find but you can have this one instead:

https://www.forbes.com/sites/christopherhelman/2022/01/02/fueled-by-billionaire-dollars-nuclear-fusion-enters-a-new-age/?sh=61b369e829f3

Apparently there is another outfit also fighting to be first to come up with the goods according to the Mail article and both of the research facilities are in Oxfordshire.  Of course this would solve all our energy problems.

There was also news that Rolls Royce are going ahead with their SMRs and are now hiring staff.

[janch]

A step in the right direction perhaps as gvt want to cut 91,000 civil service jobs which should help bring down government spending:

https://www.bbc.co.uk/news/uk-politics-6143249

Another of my terrible jobs was as the lowest of the low in the civil service (DWP) when they were expanding which they do every so often to reduce the benefits bill.  Some of the "employed" would not have been hired anywhere else,  they were that bad.

It used to be they would hire bright people, now (if it's the same as in the 90s) a lot are just to make the employment figures look better and if you have a degree it's a handicap.