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

[Harley]

14 minutes ago, Chewing Grass said:

The UK is Venezula without the warm weather.

Close but not until you pimp your wife or daughter.  Sorry to be brutal.

[Harley]

7 minutes ago, Loki said:

That you Tony? 

Oh come on, I mean.....

[Pip321]

15 minutes ago, Chewing Grass said:

The UK is Venezula without the warm weather.

Costumes….the UK also doesn’t have those fancy costumes. 

[JMD]

14 hours ago, Axeman123 said:

How is buying Alphabet and Amazon etc "sharia"? Obviously I don't see any Diageo (grog),but then I do see Mastercard and Visa (Usury). Is sharia just a scam like ESG?

90 companies is way too concentrated, but it is nice to see miners and oil.

Credit cards are not classed as usury under Sharia so long as you pay full balance at end of month, as no interest is then payable. In fact Sharia loans can charge an interest rate if the interest payed 'corresponds fairly' to the profits made by the lender. In practice this usually means the lender simply draws up a contract declaring their estimated profits from the loan and the borrower signs to confirm their agreement that the interest rate/expected profit is 'fair'. So yes Sharia finance is a scam.

[wherebee]

9 minutes ago, JMD said:

Credit cards are not classed as usury under Sharia so long as you pay full balance at end of month, as no interest is then payable. In fact Sharia loans can charge an interest rate if the interest payed 'corresponds fairly' to the profits made by the lender. In practice this usually means the lender simply draws up a contract declaring their estimated profits from the loan and the borrower signs to confirm their agreement that the interest rate/expected profit is 'fair'. So yes Sharia finance is a scam.

Sharia finance is as honest as the old catholic practice of 'indulgences'.  Religion never changes, really.

[JMD]

13 hours ago, King Penda said:

It’s a perfect opitunity to start with food stamps ie a top up which can be withdrawn has inflation fluctuates

Or the modern working equivalent of food stamps - supermarket reward card points, eg Sainsbury's nectar points, etc. This type of scheme could be implemented overnight.

[GoneDark]

9 hours ago, Cattle Prod said:

I like theories that challenge accepted orthodoxy, because that's how science works, and I'd imagine what this guy was trying to do. It's an old theory, and easily refuted now, but crackpots (and Russians!) drag it up every now and then. Briefly:

- Wells that "replenish" themselves are just connected to a resource that was bigger than first thought, usually by fractures. Fractured reservoirs are very difficult to characterise, and often produce more than the entire amount you thought was there

- We can now chemically type different oils to different sources. I can tell you if an oil comes from the wax on ancient tree leaves, or plankton.

- If oil gets too hot underground it 'cracks' to gas, much to our dissapointment, often. It's physically impossible to have oil at temperatures above ~150C, or around 5km deep. You can get it a bit deeper in cold deltas like the gulf of Mexico, but that's it.

- Thermophilic bacteria like about 100C, he's talking about 250-1000degC for is biosphere. Good luck with that

So that's not possible, but that said, oil is actually renewable...on a long time scale. Its being made all the time, drop by drop. There are oil fields in Mexico for example which are only a couple of miklion years old. But on a human time scale? No chance. We are using up a one off bounty, there is zero chance the ~36bn bbl we use every year is getting renewed naturally. Even if there was an abiotic source, it's not happening. The average age of the stuff we're using up is probably north of 100m years, so it'll take that long to repeat the bounty.

When a field is abandoned there is still 10/20/30% oil in it, you just can't get it out, so it's all moot really. We are using 36bn, and finding about 5bn every year, so it doesn't take a genius to work out what's going to happen, regardless of the source. Even our polos and ptb might have figured our that Indians getting a fridge means marauding gangs of upset people roaming their lands and robbing their properties. It certainly explains all the climate change conditioning, but not so much the lack of investment in the industry. Maybe they thought shale was a get out jail free card, with infinite supply, like many others did?

Oops.

Sounds like we're a bit fucked in the not too distant future 😞.

[DurhamBorn]

2 hours ago, Democorruptcy said:

You talk as if they put bennies and pensions up with inflation last year. The triple lock on pensions didn't happen. Lots of bennies stayed the same or hardly moved. JSA up 30p (up to age 25) or 35p (age 25 or over). They know they don't have to increase things in the usual way now, which is why there's all this talk about subsidies instead.

https://www.gov.uk/government/publications/benefit-and-pension-rates-2021-to-2022/benefit-and-pension-rates-2021-to-2022

Those 4 new arrivals have increased GDP and tax revenue! They all have to eat, need clothing and a shelter. Hopefully they smoke.

Smaller band of workers? We have just hit an all time high employed. Some of the new arrivals last year have got jobs!

Rule Britannia!

 

JSA doesnt matter,its the child elements,housing,PIP etc.The woman over the road from me gets £640 a week in bennies,if the increase goes ahead that is already legislated for from Sept CPI numbers she will get a £60 a week increase.Take 18 houses in my close,3 retired coppers,2 bennie claims,so the 5 not working and being paid from taxpayers are the ones with RPI/CPI increasing earnings.

Hours worked in the economy are also falling,more workers doing less hours,wonder why that is.Its incredible to think that all allowances are frozen as well.Unless the Tories are desperate to lose the next election?

[JMD]

13 hours ago, DurhamBorn said:

I think its the key moment of the cycle here in the UK.If the government put bennies up with inflation from September then the roadmap moves to even higher inflation and much higher risk of systemic collapse.However i see nothing yet to think they wont,no pushback,not one mention of the fact high bennies are one of the main problems.The left own the narrative at the moment due to the media etc.Employment wont collapse,but the margins will move and continue in one direction.Since Blair they had mass migration and monetising debt to mask it,now they dont.It could be the government is demonizing the BOE so that printing isnt available.My friends daughter and her boyfriend have 6 kids between them,he has just got a 4 bed house,she a 3,between them they get £3900 a month in bennies.She sublets her house of course and lives with him.My friend hates what she is doing,but like he says Browns bennies have corrupted them all.Funny enough he has retired at 52 and gone on sickness bennies,sick of working to pay bennies,even though his daughter takes a massive amount.

I notice that the msm are giving Ian Duncan Smith airtime. He is arguing for the UC system payments to be increased by I think at least inflation.

[King Penda]

30 minutes ago, JMD said:

Or the modern working equivalent of food stamps - supermarket reward card points, eg Sainsbury's nectar points, etc. This type of scheme could be implemented overnight.

Aldi don’t have them all the supermarket s take the food vouchers aready 

[King Penda]

2 minutes ago, JMD said:

I notice that the msm are giving Ian Duncan Smith airtime. He is arguing for the UC system payments to be increased by I think at least inflation.

I get about 2k a month if inflation is 9% think about that I’m not going to tell you how much I think I can squirrel away this month but I’d suspect it’s easily going to beat any other month of the year because a certain benifit is paid 4 weekly and I’m going to get it twice this month 

[King Penda]

22 minutes ago, DurhamBorn said:

JSA doesnt matter,its the child elements,housing,PIP etc.The woman over the road from me gets £640 a week in bennies,if the increase goes ahead that is already legislated for from Sept CPI numbers she will get a £60 a week increase.Take 18 houses in my close,3 retired coppers,2 bennie claims,so the 5 not working and being paid from taxpayers are the ones with RPI/CPI increasing earnings.

Hours worked in the economy are also falling,more workers doing less hours,wonder why that is.Its incredible to think that all allowances are frozen as well.Unless the Tories are desperate to lose the next election?

Those on benifits are fucked if they have never worked not just fucked realy fucked will be renting for life and at the mercy of any change in benifits in the future 

[Harley]

I attended a talk on the British workhouses over the weekend.  They weren't that long ago.

[DurhamBorn]

FT lead article about onshoring etc.Im not sure how we managed to spot this as a huge part of the cycle way before anyone else, but we did.FT talks like polos will try to slow it,but i see no chance of stopping it reversing.

“Pretty much no one has seen” these conditions “during the arc of their investing career”, according to the head of one of the world’s largest private equity groups. Charles ‘Chip’ Kaye, chief executive of Warburg Pincus,

 

Dominik Asam, chief financial officer at Airbus, warned this could have severe economic consequences.

“If a meaningful part of decades of productivity gains driven by globalisation was reversed in a short period of time, this would drive inflation up and result in a major, protracted recession,” he said. “This is exactly why I believe that major economic powers will come to the conclusion that they have to do everything they can to avert such a devastating scenario.”

[The Grey Man]

7 minutes ago, Harley said:

I attended a talk on the British workhouses over the weekend.  They weren't that long ago.

The basic origins of the NHS.

They also are the origins of some of the basics in payments.

Where is your GP? The source of which CCG pays.

An interesting area of learning.

[King Penda]

6 minutes ago, Harley said:

I attended a talk on the British workhouses over the weekend.  They weren't that long ago.

Correct im

on benifits and i

laugh a joke about them I make the best and take the piss out of a situation I did not put myself in .I’ve no shame and don’t give a fuck when people say could you walk a mile in their shoes im

like yes now come with me into the rabbit hole of my world they simply do not believe me think I’m full of shit 

[King Penda]

17 minutes ago, DurhamBorn said:

FT lead article about onshoring etc.Im not sure how we managed to spot this as a huge part of the cycle way before anyone else, but we did.FT talks like polos will try to slow it,but i see no chance of stopping it reversing.

“Pretty much no one has seen” these conditions “during the arc of their investing career”, according to the head of one of the world’s largest private equity groups. Charles ‘Chip’ Kaye, chief executive of Warburg Pincus,

 

Dominik Asam, chief financial officer at Airbus, warned this could have severe economic consequences.

“If a meaningful part of decades of productivity gains driven by globalisation was reversed in a short period of time, this would drive inflation up and result in a major, protracted recession,” he said. “This is exactly why I believe that major economic powers will come to the conclusion that they have to do everything they can to avert such a devastating scenario.”

One world government ?

[wherebee]

24 minutes ago, King Penda said:

One world government ?

they hope.

they don't have a fucking chance, thanks mainly to i) the USA 1st amendment and ii) the internet.  
 

It's going to be pretty rocky for a while though, and I am pretty sure a lot of people are going to die.

[WICAO]

7 hours ago, Harley said:

Time to cross off logistics as an ok sector in my Reit portfolio then.  That leaves mostly just the ill and elderly. 

I have a little over £30k in SGRO.  Bought at £4.29 in 2015 and currently at £11.17.  Will be interesting to watch what happens to those.

Have some 'ill and elderly' also in the form of PHP to hopefully provide some balance.

[geordie_lurch]

For all you pizza oven fans just seen the G3 Ferrari G10006 Delizia Pizza Oven at the cheapest ever price of €69 or with a fee free card about £67 delivered from Amazon Germany https://www.amazon.de/dp/B002VA4CDI

I still don't think I need one but am tempted at this price

 

[Yadda yadda yadda]

6 hours ago, DurhamBorn said:

FT lead article about onshoring etc.Im not sure how we managed to spot this as a huge part of the cycle way before anyone else, but we did.FT talks like polos will try to slow it,but i see no chance of stopping it reversing.

“Pretty much no one has seen” these conditions “during the arc of their investing career”, according to the head of one of the world’s largest private equity groups. Charles ‘Chip’ Kaye, chief executive of Warburg Pincus,

 

Dominik Asam, chief financial officer at Airbus, warned this could have severe economic consequences.

“If a meaningful part of decades of productivity gains driven by globalisation was reversed in a short period of time, this would drive inflation up and result in a major, protracted recession,” he said. “This is exactly why I believe that major economic powers will come to the conclusion that they have to do everything they can to avert such a devastating scenario.”

Disingenuous. Productivity gains? I don't think so. What he means is cost reductions. All onshored industry will need to be at least as productive as the offshored manufacturing it replaces. Not difficult with newly equipped factories.

Inflation? Yes. Recession? Yes.

[jamtomorrow]

The Government have painted themselves into a corner on working taxes and benefits chiefly because they're trying to use them to serve three fundamentally incompatible goals: 1/ generate income for the state 2/ alleviate poverty/hardship 3/ maintain incentives to work.

But you just can't do (1) and (2) without undermining (3) - necessarily (if you're signed-up on 1&2), you have to take from the top and give to the bottom, which flattens the income gradient, weakens work incentives, and creates a supply-side problem for workforce participation. A classic economic trilemma.

Now combine those declining work incentives with the growing demand-side problem of ever-increasing automation, and it'll be a miracle if we don't slip further into a full-blown crisis of workforce participation.

Note that you'll only ever be presented with a political choice between 1&2 or 1&3. 2&3 is not on offer, because it would take something like Georgism to achieve, and Georgism is Kryptonite for the rent-seeking parasites.

[Chewing Grass]

I have a gut feeling that the next governmental wheeze will be letting repayment mortgage holders switch to Interest Only for the duration, however long that may be.

[Pip321]

8 hours ago, DurhamBorn said:

JSA doesnt matter,its the child elements,housing,PIP etc.The woman over the road from me gets £640 a week in bennies,if the increase goes ahead that is already legislated for from Sept CPI numbers she will get a £60 a week increase.Take 18 houses in my close,3 retired coppers,2 bennie claims,so the 5 not working and being paid from taxpayers are the ones with RPI/CPI increasing earnings.

Hours worked in the economy are also falling,more workers doing less hours,wonder why that is.Its incredible to think that all allowances are frozen as well.Unless the Tories are desperate to lose the next election?

You see this type of claimant more than me….I am probably a bit more of a trusting liberal (not a wokey softie new style liberal) and I want to protect those who truly need it but fairness for those who graft. Work must pay 

My lad works shifts, his Mrs is a carer and they have 2 kids. They struggle away each month and it doesn’t seem right at all that actually benefits could work almost as well for them.

With a daft student loan even I am thinking they would be better off (time and motion wise) for him to earn less and her to earn a tad more and reduce their tax burden.

Now reality is they don’t have to seriously worry too much about making ends meet….they have a safety net (me) for big contingency spends, they had a 40% deposit for a nice house in a nice town and I am sure nice holidays as their kids get older….

However many don’t have family to support them and I imagine many are renting so it’s not as though they feel are even ‘moving forward’ by chipping away a mortgage or whatever.

Trying to stop career benefit claimants seems impossible without hurting some innocents (and those innocents could just be tipped over the edge). Genuinely wondering what the answer is now we enter inflation, lots of older people ‘opting out’….

It feels in some way the government have thrown money into furlough and benefits but have no real idea about how much or indeed how little someone needs to live. Some benefits like you describe seem ridiculously high, some seem ridiculously low 

I quite like UBI or at least a genuine attempt to price it out….at a really really low level to just survive. Immigrant protected etc of course. And disability assistance provided for in real terms rather than £. And having 6 kids without one parent working 40 hours shouldn’t be an option. 

But rather than my UBI ethoughts what do you think we could do, that’s sorts the woman across the road from sponging but protects those that need it….that’s not a ‘challenge’ it’s a genuine wonderment because I am struggling to know.

Seems to me some a the top, and some at the bottom spoil it for everyone.  

[Majorpain]

News this morning said new Aussie PM's top priority is climate change, goodbye Australian coal exports that are keeping ROW afloat after Russia is cutoff.