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

[Loki]

5 minutes ago, Majorpain said:

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.

You know, sometimes I think this is intentional

[Bricormortis]

FYI.

“2022 is the mid election year, which is the weakest of the 4-year presidential election year cycle. Historically (going back to 1950), the S&P 500 declines on average about 20% into the mid-term election year low.

The following year (the pre election year, 2023) is the strongest year of the election year cycle as incumbent presidents prime the pump to increase the odds of reelection. Historically, the S&P 500 gains on average about 50% from the mid election year low to the pre election year high.”

[Loki]

8 minutes ago, Bricormortis said:

FYI.

“2022 is the mid election year, which is the weakest of the 4-year presidential election year cycle. Historically (going back to 1950), the S&P 500 declines on average about 20% into the mid-term election year low.

The following year (the pre election year, 2023) is the strongest year of the election year cycle as incumbent presidents prime the pump to increase the odds of reelection. Historically, the S&P 500 gains on average about 50% from the mid election year low to the pre election year high.”

Watch and learn

[HousePriceMania]

8 hours ago, King Penda said:

One world banker government ?

 

[DurhamBorn]

2 hours ago, geordie_lurch said:

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

 

Trust me you do need one,thats a great price.

[Bricormortis]

7 minutes ago, Loki said:

Watch and learn

Yes, the rather large fly in the ointment is Biden's desire to be seen tackling inflation. It is quite possible he doesn't prime the pumps pre- election and lets the markets do what they will.

[baffledbyzirp]

9 minutes ago, Majorpain said:

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.

Australia faces by an invidious reality. The country is reliant upon the export of raw materials to China for its balance of trade credits. China cannot transition to a low carbon economy because its manufacturing base requires coal powered electricity, steel and other carbon intensive processes. Furthermore, whatever Australia does is a piss in the ocean compared to China, whose economic production will certainly impact its climate. Australia's economic boom post the GFC was built on the back of China ramping up production. This was clearly demonstrated in a property bubble that was encouraged and supported by government policy such as soft lending criteria and access to superannuation savings for home purchases.

The choice is thus;

1. Destroy the economy, make home owners bankrupt, hollow out the banking sector, see unemployment rocket and continue to suffer the dire consequences of climate change or,

2. Continue to prop up a moribund system with profits generated by feeding the insatiable appetite of its neighbour for raw materials. Steve Keen is very good on this subject.

If you factor in the political desire to be reelected, the new PM is basically fucked.

The universal truth is that human beings are all happy to see other people behave responsibly while they abuse the system a la Al Gore who won an Oscar for his film 'an Inconvenient Truth', lecturing to an audience of shysters about the need for reduced carbon consumption from places like Davos while flying around the world in a private jet, owning several homes that were dreadfully built from an environmental perspective. His endeavours had a neat little ancillary benefit of making Gore a multi-millionaire. Cui bono?

[DurhamBorn]

32 minutes ago, Pip321 said:

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.  

I think a UBI is certain,its just when,could be next year,could be 30 years,but its coming.It needs to be set at £80 an adult £50 for children,but only one £50,not multiple ,so single with however many kids you get £130.Couple £210.You would need to lower tax allowance as well.

The reason we dont have one yet is housing,they simply dont know how to handle that.One option would be for the government to built shared housing,big blocks with shared kitchens etc.It would mean everyone had basic housing provided,but huge incentive to get a job and rent/buy your own place.It is housing though stopping UBI at the moment.

I think welfare has reached the point where it eats itself.Im currently putting in a claim for attendance allowance for my dad,once we get that il claim carers allowance for me,both none means tested,we will give the money to the kids to put in their SIPPs.No choice,if you dont then your family will be left behind.

From a pure macro point,with the BOE now cut off from monetising debt i cant see how the government can fund itself.Likely they will come after ordinary peoples wealth.They have taken cash savings with inflation,housing and pensions will be next.

[ashestoashes]

48 minutes ago, Chewing Grass said:

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.

Thought banks were lining up to become landlords, they'll just convert the mortgages to a rental agreement

[Don Coglione]

2 minutes ago, DurhamBorn said:

I think a UBI is certain,its just when,could be next year,could be 30 years,but its coming.It needs to be set at £80 an adult £50 for children,but only one £50,not multiple ,so single with however many kids you get £130.Couple £210.You would need to lower tax allowance as well.

The reason we dont have one yet is housing,they simply dont know how to handle that.One option would be for the government to built shared housing,big blocks with shared kitchens etc.It would mean everyone had basic housing provided,but huge incentive to get a job and rent/buy your own place.It is housing though stopping UBI at the moment.

I think welfare has reached the point where it eats itself.Im currently putting in a claim for attendance allowance for my dad,once we get that il claim carers allowance for me,both none means tested,we will give the money to the kids to put in their SIPPs.No choice,if you dont then your family will be left behind.

From a pure macro point,with the BOE now cut off from monetising debt i cant see how the government can fund itself.Likely they will come after ordinary peoples wealth.They have taken cash savings with inflation,housing and pensions will be next.

As I have long maintained, all that housing equity is a sitting duck. Just unsure of the mechanism by which it will be extracted without committing political suicide. One for the Labour party, methinks?

[wherebee]

48 minutes ago, Majorpain said:

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.

Melbourne bread store, 2023, all those inner city green voters wonder where the fucking bread went.

 

[Lightscribe]

https://www.bloomberg.com/news/articles/2022-05-22/polish-pm-calls-on-norway-to-share-oil-and-gas-profits-windfall
 

As if Poland didn’t have enough gibs out of the EU, they want a slice of Noway’s sovereign wealth fund too and they’re not even in the EU… 

[Pip321]

5 minutes ago, DurhamBorn said:

I think a UBI is certain,its just when,could be next year,could be 30 years,but its coming.It needs to be set at £80 an adult £50 for children,but only one £50,not multiple ,so single with however many kids you get £130.Couple £210.You would need to lower tax allowance as well.

The reason we dont have one yet is housing,they simply dont know how to handle that.One option would be for the government to built shared housing,big blocks with shared kitchens etc.It would mean everyone had basic housing provided,but huge incentive to get a job and rent/buy your own place.It is housing though stopping UBI at the moment.

I think welfare has reached the point where it eats itself.Im currently putting in a claim for attendance allowance for my dad,once we get that il claim carers allowance for me,both none means tested,we will give the money to the kids to put in their SIPPs.No choice,if you dont then your family will be left behind.

From a pure macro point,with the BOE now cut off from monetising debt i cant see how the government can fund itself.Likely they will come after ordinary peoples wealth.They have taken cash savings with inflation,housing and pensions will be next.

Thanks.

I think UBI seems like a big softie leftie liberal idea…..but in reality if done properly it could be just the opposite.

Also if positioned correctly any initial resistance may infact expose those milking the system….ie hey I can’t live on £x because my household currently gets £28k benefits. All too often spoken by someone just from a nail salon.  That would make even myself (liberal softie but maybe not really) feel it’s fair, it’s equal and it’s enough to survive.

Of course survival isn’t enough, but it is for a temporary period which for the majority of claimants should be the position….

However, this new ‘poverty measure’ is based against averages but really they should be absolutes. Even if that is set by real people who know real household needs.

Lots of thoughts for me to ponder but I wonder in reality some ‘lefties’ and some ‘righties’ probably aren’t a million miles away from each other. The working class left….were working…not claiming.😉

[Loki]

10 minutes ago, wherebee said:

Melbourne bread store, 2023, all those inner city green voters wonder where the fucking bread went.

 

[Plan-b]

1 minute ago, Lightscribe said:

https://www.bloomberg.com/news/articles/2022-05-22/polish-pm-calls-on-norway-to-share-oil-and-gas-profits-windfall
 

As if Poland didn’t have enough gibs out of the EU, they want a slice of Noway’s sovereign wealth fund too and they’re not even in the EU… 

Then the Poles need to share their energy wealth too, the country is full of coal mines.

https://en.wikipedia.org/wiki/List_of_mines_in_Poland

 

 

[baffledbyzirp]

15 minutes ago, DurhamBorn said:

I think a UBI is certain,its just when,could be next year,could be 30 years,but its coming.It needs to be set at £80 an adult £50 for children,but only one £50,not multiple ,so single with however many kids you get £130.Couple £210.You would need to lower tax allowance as well.

The reason we dont have one yet is housing,they simply dont know how to handle that.One option would be for the government to built shared housing,big blocks with shared kitchens etc.It would mean everyone had basic housing provided,but huge incentive to get a job and rent/buy your own place.It is housing though stopping UBI at the moment.

I think welfare has reached the point where it eats itself.Im currently putting in a claim for attendance allowance for my dad,once we get that il claim carers allowance for me,both none means tested,we will give the money to the kids to put in their SIPPs.No choice,if you dont then your family will be left behind.

From a pure macro point,with the BOE now cut off from monetising debt i cant see how the government can fund itself.Likely they will come after ordinary peoples wealth.They have taken cash savings with inflation,housing and pensions will be next.

DB I think you are spot on. Like Old Mother Hubbard what shall they do when the cupboard is bare? They will identify taxable wealth. Multinationals and the super wealthy have the means to protect themselves by employing tax advisors and lawyers or shifting domicile status to a flag of convenience. Leona Helmsley was right, only little people pay taxes. The middle will therefore be the easiest and most fruitful hunting ground. Where do most of us have our wealth? Property and pensions. Second homes and BTL investments will get hammered. For Labour it is positive vote winner. It employs the false narrative that landlords are greedy and forcing the price of homes beyond the capacity of poor working folk aka benefits claimants. Landlords will be treated like the kulaks in Stalin's Russia. Pensions is a no brainer, so much value so easy to nibble a bit here and there. 

Reform of the welfare state and a reduction in the size and scope of government will only be considered in extremis.

[Democorruptcy]

9 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?

Now they were prepared to back out of the pension triple lock last year, they might trim the bennies uplift as well. If they don't, fasten your seatblets and buckle up for a new wealth tax.

[Yadda yadda yadda]

9 minutes ago, Lightscribe said:

https://www.bloomberg.com/news/articles/2022-05-22/polish-pm-calls-on-norway-to-share-oil-and-gas-profits-windfall
 

As if Poland didn’t have enough gibs out of the EU, they want a slice of Noway’s sovereign wealth fund too and they’re not even in the EU… 

They should ask Saudi.

[HousePriceMania]

10 minutes ago, baffledbyzirp said:

DB I think you are spot on. Like Old Mother Hubbard what shall they do when the cupboard is bare? They will identify taxable wealth. Multinationals and the super wealthy have the means to protect themselves by employing tax advisors and lawyers or shifting domicile status to a flag of convenience. Leona Helmsley was right, only little people pay taxes. The middle will therefore be the easiest and most fruitful hunting ground. Where do most of us have our wealth? Property and pensions. Second homes and BTL investments will get hammered. For Labour it is positive vote winner. It employs the false narrative that landlords are greedy and forcing the price of homes beyond the capacity of poor working folk aka benefits claimants. Landlords will be treated like the kulaks in Stalin's Russia. Pensions is a no brainer, so much value so easy to nibble a bit here and there. 

Reform of the welfare state and a reduction in the size and scope of government will only be considered in extremis.

Eventually you hit a wall.

How does it all end ?

 

[Chewing Grass]

28 minutes ago, Plan-b said:

Then the Poles need to share their energy wealth too, the country is full of coal mines.

https://en.wikipedia.org/wiki/List_of_mines_in_Poland

 

 

Coal is now like 'the Pox', not something you want to be visibly seen with...

[feed]

51 minutes ago, DurhamBorn said:

From a pure macro point,with the BOE now cut off from monetising debt i cant see how the government can fund itself.Likely they will come after ordinary peoples wealth.They have taken cash savings with inflation,housing and pensions will be next.

Not yet. Populist government, they'll not go after pension or property (first property at least).  Or if they do, they'll blink in the face of the backlash. 

Russell Napiers take from his recent podcasts.  Financial repression or stealing from old people slowly.  You can't steal slowly with direct attacks.  

They'll keep printing until they have a narrative to cut spending. That narrative may be a collapse and the IMF doing the dirty work.  
 

[RJT1979]

1 hour ago, DurhamBorn said:

Trust me you do need one,thats a great price.

Can you do the oven ready pizzas in them?

[M S E Refugee]

11 minutes ago, feed said:

Not yet. Populist government, they'll not go after pension or property (first property at least).  Or if they do, they'll blink in the face of the backlash. 

Russell Napiers take from his recent podcasts.  Financial repression or stealing from old people slowly.  You can't steal slowly with direct attacks.  

They'll keep printing until they have a narrative to cut spending. That narrative may be a collapse and the IMF doing the dirty work.  
 

No one will realise they have robbed until it's too late.

 

[Chewing Grass]

The contract between People and Government (not migrants) has been breaking down for years.

The 'private' pension system needs returns of 5% (ignoring inflation) to work and due to government meddling (regulation) most only return 3% at best.

Over 40 years that is the pension effectively halved.

[geordie_lurch]

1 hour ago, DurhamBorn said:

Trust me you do need one,thats a great price.

Ordered one @DurhamBorn as it seems like a good thing to add to my limited meals repertoire so if you can point me to your preferred pizza base recipe(s) at some point that would be much appreciated