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

[Noallegiance]

Just thought

These new helicopter drops are straight to bank accounts again.

Chances of it actually being spent on food and energy?

Chances of it being spent on Robinhood?

[JimmyTheBruce]

9 hours ago, invalid said:

 

Some more detail on the energy levy. I can't help but think this won't work out as they expected. Note my bit in bold - 'if' looks to me like they are leaving the door open for this to be a permanent tax. I wonder what they can invest in? New oil fields, new infrastructure, or just look for ways to shift profits over seas. Perhaps they might invest in Bitcoin - buy the dip! 

 

 

In order both to fairly tax the extraordinary profits and encourage investment, the Chancellor announced a temporary new Energy Profits Levy with a generous investment allowance built in.

The new Levy will be charged on oil and gas company profits at a rate of 25% and is expected to raise around £5 billion in its first 12 months, which will go towards easing the burden on families. It will be temporary, and if oil and gas prices return to historically more normal levels, will be phased out.

The new Investment Allowance, similar in style to the super-deduction, incentivises companies to invest through saving them 91p for every £1 they invest. This nearly doubles the tax relief available and means the more a company invests, the less tax they will pay.

 

If its extra tax on profits, won't they increase share buybacks to reduce those profits?

[Majorpain]

23 minutes ago, Noallegiance said:

Just thought

These new helicopter drops are straight to bank accounts again.

Chances of it actually being spent on food and energy?

Chances of it being spent on Robinhood?

Chances of it being spent on Drugs?

[DurhamBorn]

Asda sales down 9% in the first quarter.If they arent inflation adjusted thats a huge fall.Maybe thats why they are demanding more handouts from the government.

https://www.theguardian.com/business/2022/may/26/sunaks-15bn-cost-of-living-package-not-enough-asda-boss-stuart-rose

[Starsend]

6 minutes ago, Majorpain said:

Chances of it being spent on Drugs?

I'm spending mine on drugs.

Fuck yeah.

[Starsend]

2 minutes ago, DurhamBorn said:

Asda sales down 9% in the first quarter.If they arent inflation adjusted thats a huge fall.Maybe thats why they are demanding more handouts from the government.

https://www.theguardian.com/business/2022/may/26/sunaks-15bn-cost-of-living-package-not-enough-asda-boss-stuart-rose

Don't think I've heard of a fall that large before. Shows how skint people must be, recession incoming.

[Tingles]

This thread/community is always educational, enjoyable and stimulating.  The past few days (and some could argue this year) have been exceptional IMO.  Thank you to all contributors.  I am grateful and feel lucky to have access to such knowledge, opinions and perspectives during these fascinating times 

[JMD]

3 hours ago, Libspero said:

So this actually seems like quite a clever idea now.   Essentially the energy companies argue that a windfall tax will stop them being able to invest in new infrastructure,  so the government are pressing their toes to the fire and keeping them honest.   They are basically saying,  if you really do invest in UK infrastructure (and quickly) you will barely pay a penny in tax.   On the other hand,  if you don’t we’re going to properly gouge you.

I don’t agree with windfall taxes as a principle..   but this one seems a bit more nuanced than just a cash grab.  

Plus investment in gas infrastructure (now classed as a green energy), the energy companies can use that expenditure as a tax write off. 

[feed]

Think it may just be asda being shit post PE and the inevitable decline as more people move to Aldi/Lidl

https://www.retailgazette.co.uk/blog/2022/03/data-lidl-overtakes-co-op-to-become-uks-sixth-largest-supermarket/

In the latest Kantar Worldpanel market share data for the 12 weeks to 20 February 2022, Lidl grew sales by 3.3% and added 1 million new customers, making it the joint-fastest growing grocer alongside Aldi.

[Bus Stop Boxer]

2 hours ago, BWW said:

Have you not had the lidl squits yet? Worse than Delhi belly.

They've definitely given me food poisoning now 3 times, I no longer buy any of their brand or fresh meat or fish or ready meals there.

I'm the same with ALDI pork chops.

Absolute chaos.

[Bus Stop Boxer]

1 hour ago, DurhamBorn said:

Asda sales down 9% in the first quarter.If they arent inflation adjusted thats a huge fall.Maybe thats why they are demanding more handouts from the government.

https://www.theguardian.com/business/2022/may/26/sunaks-15bn-cost-of-living-package-not-enough-asda-boss-stuart-rose

They need to review their George clothing ad policy.

GWGB.

[Bus Stop Boxer]

1 hour ago, Noallegiance said:

Just thought

These new helicopter drops are straight to bank accounts again.

Chances of it actually being spent on food and energy?

Chances of it being spent on Robinhood?

Nandos and Spoons.

[Pip321]

1 hour ago, HousePriceMania said:

Eh? 

 

Id say you need to get it into a mixture or assets, housing, shares, food, transport, bonds, land, clothes, guns, anything people need 

Preaching to the converted. I didn’t mean me…i meant the great unwashed.😉👍🏻

[Democorruptcy]

Hungary also doing windfall taxes but not stopping at energy companies:

Quote

 

Hungary’s government has unveiled €5bn of tax rises and spending cuts as it takes its first steps under emergency powers introduced this week in response to an “economic crisis” sparked by war in neighbouring Ukraine.

Prime minister Viktor Orbán’s government said the new powers would allow the government to act swiftly to address a surge in inflation and energy prices and were not a move to undermine parliament.

The windfall taxes, worth €2bn, target the “extra profits” that companies have made from higher energy prices, interest rates and banking fees, as well as more consumer spending in sectors such as telecommunications since the pandemic.

Banks and energy companies will be tapped for the bulk of the extra revenue, with increased taxes also on telecommunications companies, airlines, insurers, retail companies, drug retailers and advertisers.

Márton Nagy, minister for economic strategy, said the measures “only [take] the extraordinary profits — we do not think this should cause elevated prices on the consumer side, there should be no extra inflation nor slowing growth”.

The Budapest stock index BUX fell more than 5 per cent on the news, with energy group MOL dropping 9 per cent, OTP Bank shedding 8 per cent and Magyar Telekom falling 4.5 per cent.

The government will use €1.8bn from the extra tax revenue to keep funding a household energy price cap, which is expected to cost the budget as much as €3bn this year.

https://12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2F6ebebe00-d7dc-42cb-a8b7-fb367ae1907c

 

 

[afly]

50 minutes ago, Democorruptcy said:

Hungary also doing windfall taxes but not stopping at energy companies:

 

We’ve legitimised it

[Lightscribe]

On 14/05/2022 at 15:16, janch said:

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.

This will cost the public billions. As I said previously said it’s a total waste of time as I actually worked many years ago working out the severance packages.

All this will do is allow 90k boomers retire at 55 rather than 60. The early retirement scheme we used to call it. It would be cheaper to just let them naturally retire.

[geordie_lurch]

4 hours ago, afly said:

We’ve legitimised it

Yes but I think we were just the first to put a larger plan by the WEF into action. The countries of the world have never agreed at a global level on so much so quickly as the last few years Just look how the never before tried or justified Covid lockdowns were forced on us all after China said that's what we should do and the new WHO pandemic treaty that gives the WHO over arching control of what Governments have to do in the next pandemic which is nailed on to be within the next few years

I don't want to derail this thread but for those who don't know about the WHO pandemic treaty and how it's tied to digital ID have a read here . Via this, it then opens the door to CBDCs probably via some global debt reset and all the old currencies moving to digital versions. TPTB will then not only be able to steal our dividends via 'one off' windfall taxes but force us to spend every single digital £ we earn only on things that are on the 'allowed' lists. All of this will then be tied into you digital credit score which will also double as your carbon tracking log.

[Lightscribe]

8 hours ago, feed said:

Of course i'm.  The disinflation cycle will move to inflation and we'll not see hyperinflation.  
The crisis we face today, is nothing compared to what has happened in the past and here humanity is.

Unless you're expecting nuclear annihilation.  But that risk has been with us for decades.  

No not nuclear annihilation, what good will that do for anyone? 

Hyperinflation…. I wouldn’t be so sure. It’s a strong possibility that’s exactly where we’re heading. Remember my view from the very beginning on this thread was that we would be heading to CBDCs and a new monetary system by 2030.

We’ve already moved into the inflation cycle and our esteemed leaders still don’t get what needs to be done (or rather they know exactly and we’re purposely heading up that path anyway).

The reason why it will be worse than 1929, is ‘people’. Never before in history has the western population been so weak and non self-sufficient. Any hardship and change to the structural status quo will cause chaos and societal breakdown.

You’re right in the fact that it won’t be anything humanity hasn’t faced before as it’s part of a ‘super cycle’. It’s just that we’ve never had the size of population we have today that’s so ill equipped to deal with it. 

Thankfully most on here are very self-sufficient and that will be key. This gives me an excuse to post this again.

[Lightscribe]

1 hour ago, geordie_lurch said:

Yes but I think we were just the first to put a larger plan by the WEF into action. The countries of the world have never agreed at a global level on so much so quickly as the last few years Just look how the never before tried or justified Covid lockdowns were forced on us all after China said that's what we should do and the new WHO pandemic treaty that gives the WHO over arching control of what Governments have to do in the next pandemic which is nailed on to be within the next few years

I don't want to derail this thread but for those who don't know about the WHO pandemic treaty and how it's tied to digital ID have a read here . Via this, it then opens the door to CBDCs probably via some global debt reset and all the old currencies moving to digital versions. TPTB will then not only be able to steal our dividends via 'one off' windfall taxes but force us to spend every single digital £ we earn only on things that are on the 'allowed' lists. All of this will then be tied into you digital credit score which will also double as your carbon tracking log.

Just to add to this your digital ID is coming whether you like it or not.

https://www.gov.uk/government/news/new-legislation-set-to-make-digital-identities-more-trustworthy-and-secure

Some people will say, so what it actually makes things easier having an ‘all in one’ ID anyway. Remember several years ago people would have been rioting over this.

They time the next authoritarian milestone when the public are weary enough just to accept it. Just like with fuel prices now and yellow vest riots over them a few years back, we’re fighting a war now you see, ‘dig for victory’ and all that. 

https://www.pinsentmasons.com/out-law/news/2022/03/uk-to-legislate-for-digital-ids

Why should you be bothered? Because it gives these public bodies permission to share your data to anyone they see fit (hope you all opted out on that NHS form I posted on here a couple years back)

https://brownstone.org/articles/the-who-treaty-is-tied-to-a-global-digital-passport-and-id-system/

[Lightscribe]

6 hours ago, Bus Stop Boxer said:

Nandos and Spoons.

Wouldn’t be a bad shout. Short term investment calls I learnt the hard way after the 2020 dip, Halfords for bikes and gym equipment for lockdowns just wasn’t on my radar.

My one from here will be Rentokil (hopefully go cheaper in a wider market sell-off). 

They’ll be lots of empty commercial buildings in recession as businesses go bust and well as council workers striking over pay for bin collection etc. 

 

 

 

[Ash4781b]

And it begins. There are requests promoted in the media this morning for Sunak to go further with both more money to and baselining yesterday’s  announcements. 
 

 

[Ash4781b]

8 hours ago, DurhamBorn said:

Asda sales down 9% in the first quarter.If they arent inflation adjusted thats a huge fall.Maybe thats why they are demanding more handouts from the government.

https://www.theguardian.com/business/2022/may/26/sunaks-15bn-cost-of-living-package-not-enough-asda-boss-stuart-rose

Will have to wait for other supermarkets I guess. Yeah imo that did look like an emergency mini-budget yesterday.

Is the narrative that people are rapidly cutting back ? It is probably hard to pick this up in money supply numbers due to pandemic changes there around cash. It’s hard to read just walking around a town centre as they are quiet and boarded up shells due to workplace changes post covid.

[Yadda yadda yadda]

1 hour ago, geordie_lurch said:

Yes but I think we were just the first to put a larger plan by the WEF into action. The countries of the world have never agreed at a global level on so much so quickly as the last few years Just look how the never before tried or justified Covid lockdowns were forced on us all after China said that's what we should do and the new WHO pandemic treaty that gives the WHO over arching control of what Governments have to do in the next pandemic which is nailed on to be within the next few years

I don't want to derail this thread but for those who don't know about the WHO pandemic treaty and how it's tied to digital ID have a read here . Via this, it then opens the door to CBDCs probably via some global debt reset and all the old currencies moving to digital versions. TPTB will then not only be able to steal our dividends via 'one off' windfall taxes but force us to spend every single digital £ we earn only on things that are on the 'allowed' lists. All of this will then be tied into you digital credit score which will also double as your carbon tracking log.

Effectively everyone is now a benefits recipient. £400 for utilities and £150 for council tax (latter is 'only' around 80% of the population). They're not reducing taxes on utilities. They're taking your money and giving it back to you. Of course they can easily stop giving it back to people they don't like.

[invalid]

8 hours ago, JimmyTheBruce said:

If its extra tax on profits, won't they increase share buybacks to reduce those profits?

 

I don't think that share buybacks are tax deductible, i.e. its paid for from post tax profits. Not 100% sure on this and happy to be corrected.

[DurhamBorn]

2 minutes ago, Yadda yadda yadda said:

Effectively everyone is now a benefits recipient. £400 for utilities and £150 for council tax (latter is 'only' around 80% of the population). They're not reducing taxes on utilities. They're taking your money and giving it back to you. Of course they can easily stop giving it back to people they don't like.

Brown started that with tax credits (the start of the disaster we are now in).He gave the £11 a week to almost everyone with kids,then banged on another £55 a child for those on bennies.His reasoning was the middle would turn a blind eye to massive welfare spending if they were getting a bung.He simply took theirs back by changing the pension dividend rules.

The thing i can understand from the Tories is that Osborne started to get to grips with welfare,yet they have undone his work and more.10% increases in bennies next April are insane,your talking £50 a week uplifts for some.Hugely inflationary.Yet tax allowances frozen.Its a direct attack on working people just above bennie level.

The key thing to remember though is the BOE cant QE,so the government needs much more tax,and it will be wealth tax.