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

[Lightly Toasted]

1 hour ago, DurhamBorn said:

The government have unleashed the destruction of work.

 

Chilling when you put it like that 

[Barnsey]

22 minutes ago, Calcutta said:

Are the yanks planning any more stimmy checks? 

I'm confusing myself trying to work out what happens to our economy if we go all out for inflation whilst the US is tightening, does the pound collapse? 

Are we about to see a u-turn in the fed? 

They'll definitely break things first, we thought furlough and loans were bad enough but the yanks really did make a huge mistake with their insanely generous and indiscriminate stimmy cheques, something different next time I think.

[Nomad]

This govt appear to have no clue about basic economics. The free market and free enterprise is being eroded, the theory that you can better yourself by hard work is no longer valid. The way to better yourself is through benefits and free housing. I really don't understand this madness, it seems even the tories have bought into it. One illustration of this is the food bank mania, I bet food bank goers still have their phones and massive tvs and plenty of alcohol to drink. What has happened to the survival of the fittest? We are on a race to the bottom.

[BurntBread]

3 minutes ago, Nomad said:

This govt appear to have no clue about basic economics. The free market and free enterprise is being eroded, the theory that you can better yourself by hard work is no longer valid. The way to better yourself is through benefits and free housing. I really don't understand this madness, it seems even the tories have bought into it. One illustration of this is the food bank mania, I bet food bank goers still have their phones and massive tvs and plenty of alcohol to drink. What has happened to the survival of the fittest? We are on a race to the bottom.

Survival of the fattest.

[Bobthebuilder]

16 minutes ago, Nomad said:

What has happened to the survival of the fittest?

They are all posting on this thread.

[Loki]

4 minutes ago, Bobthebuilder said:

They are all posting on this thread.

Cos we can still afford food

[Democorruptcy]

4 hours ago, wherebee said:

how can I get that clip without the tweet?  I need it for something.

If you want to download any videos on Twitter:

https://www.tubeoffline.com/download-Twitter-videos.php

If you go to the Home page there's an index of all the websites you can download stuff from.

[DurhamBorn]

1 hour ago, JohnnyB said:

Setting a really bad precedent to shovel printed deficit money to certain groups. Government picking winners and losers, just as they raise taxes only paid for by workers.

Wish someone in the media would dare to suggest that housing & rents have been rising and rising, so if people need to spend more on food and energy then housing costs need to fall? And they would have done without this perverse bribe. Current paradigm seems to be that no pain can ever be taken.

I'm going to predict that inflation in 12 months time will be higher than it is today, despite the "expert predictions".

 

My roadmap says 7.2% inflation next Sept ,iv had to change a few things though based on the government.I didnt expect them to make such huge policy errors.

However the very interesting part is their actions mean higher rates,so its a huge error,OR they want to kill BTL etc and get a floor under the pound and they are injecting fiscal so the BOE can tighten through rates.My roadmap is also now saying the pound is going to go up.My gut was down,but no, its saying up.

Telcos should continue up,unless government decides to take those divis as well.

[Axeman123]

1 hour ago, Calcutta said:

Are the yanks planning any more stimmy checks? 

I'm confusing myself trying to work out what happens to our economy if we go all out for inflation whilst the US is tightening, does the pound collapse? 

Are we about to see a u-turn in the fed? 

There is a convincing case that the Fed follows Treasury bond markets, which appear to be now pricing in a pivot. A video I watched last night also made the case that US real yields are actually about to become positive, which would be incredibly tight monetary policy. The whole premise was that 5 year inflation expectations (as derived from breakevens) were about to drop below the 5 year bond yield. 

[Noallegiance]

9 minutes ago, DurhamBorn said:

My roadmap says 7.2% inflation next Sept ,iv had to change a few things though based on the government.I didnt expect them to make such huge policy errors.

However the very interesting part is their actions mean higher rates,so its a huge error,OR they want to kill BTL etc and get a floor under the pound and they are injecting fiscal so the BOE can tighten through rates.My roadmap is also now saying the pound is going to go up.My gut was down,but no, its saying up.

Telcos should continue up,unless government decides to take those divis as well.

Surely that's not doing Brits in PMs a favour?

[DurhamBorn]

13 minutes ago, Noallegiance said:

Surely that's not doing Brits in PMs a favour?

Still negative real rates.PMs will reward again in their own time,when they feel like it.

[Chewing Grass]

The cat is out of the bag, the Scottish Dude and Jimmy are onto the same thing, an unusual video for Jimmy.

 

[Democorruptcy]

Iran seizes two Greek oil tankers in Strait of Hormuz

[dnb24]

1 hour ago, DurhamBorn said:

However the very interesting part is their actions mean higher rates,so its a huge error,OR they want to kill BTL etc and get a floor under the pound and they are injecting fiscal so the BOE can tighten through rates.My roadmap is also now saying the pound is going to go up.

Really interesting- there are some damn smart people on this thread- I’ve been wracking my brain trying to understand why they are seemingly making such huge policy mistakes- I’ve been going from WEF stuff/to they are useless/to the age old realisation that they usually do things for a reason- just why- and this hits it on the head. Cheers DB

[M S E Refugee]

Just now, dnb24 said:

Really interesting- there are some damn smart people on this thread- I’ve been wracking my brain trying to understand why they are seemingly making such huge policy mistakes- I’ve been going from WEF stuff/to they are useless/to the age old realisation that they usually do things for a reason- just why- and this hits it on the head. Cheers DB

I think it is the WEF/Elites behind all of this and I think they have lost control of the situation.

The World is far too complicated for these Pea-Brained Technocrats to comprehend.

Their plans may work in theory but not in practice.

[Pip321]

1 hour ago, DurhamBorn said:

My roadmap says 7.2% inflation next Sept ,iv had to change a few things though based on the government.I didnt expect them to make such huge policy errors.

However the very interesting part is their actions mean higher rates,so its a huge error,OR they want to kill BTL etc and get a floor under the pound and they are injecting fiscal so the BOE can tighten through rates.My roadmap is also now saying the pound is going to go up.My gut was down,but no, its saying up.

Telcos should continue up,unless government decides to take those divis as well.

The appetite for housing round us (N York’s) is still balmy both rental and sales…..do you see real falls, value inflated away or rather a softening of actual prices. I am finding it difficult to read. London of course a different mattter…I see real falls there 

[Barnsey]

12 minutes ago, Pip321 said:

The appetite for housing round us (N York’s) is still balmy both rental and sales…..do you see real falls, value inflated away or rather a softening of actual prices. I am finding it difficult to read. London of course a different mattter…I see real falls there 

As previously discussed, surely we're seeing some permanent changes with sticky work from home patterns, a redistribution of housing wealth from the SE to other regions. Given the highest prices to earnings ratios are darn sarf, I'd expect this rebalancing to continue throughout this decade as mortgage rates edge up, and reshoring (along with labour shortages) brings better paid jobs back to neglected yet well placed areas such as the NE and West/East Midlands. The trend was already in place pre covid, and doesn't seem to be reverting any time soon.

If we're back at 70s levels of inflation...

[snaga]

6 minutes ago, Pip321 said:

The appetite for housing round us (N York’s) is still balmy both rental and sales…..do you see real falls, value inflated away or rather a softening of actual prices. I am finding it difficult to read. London of course a different mattter…I see real falls there 

yes, same here, in March our neighbours sold in a week for above asking price, and a friend in running club just sold theirs in a week.

The property spell hasn't broken yet in these parts.

[Chewing Grass]

I have a new index to watch courtesy of Horsemart.co.uk

Its like Autotrader for useless lumps of meat that are generally kept on tax-free agricultural land that could be used to feed people.

Today 28/05/22 = 5180

https://www.horsemart.co.uk/horses-for-sale.php

[leonardratso]

hey, whos pretending to be a chinaman on the telegraph;

[Democorruptcy]

40 minutes ago, Pip321 said:

The appetite for housing round us (N York’s) is still balmy both rental and sales…..do you see real falls, value inflated away or rather a softening of actual prices. I am finding it difficult to read. London of course a different mattter…I see real falls there 

Recently I've considered a return to Yorkshire so been looking at the market over there. The agents seem to be doing a lot of viewing launch days, as if they are trying to block book viewings to get people fighting over properties. It seems to work because supply is so low.

[BadAlchemy]

33 minutes ago, Chewing Grass said:

I have a new index to watch courtesy of Horsemart.co.uk

Its like Autotrader for useless lumps of meat that are generally kept on tax-free agricultural land that could be used to feed people.

Today 28/05/22 = 5180

https://www.horsemart.co.uk/horses-for-sale.php

I just had a look at that on Wayback Machine. Two previous examples...

May 27 2018 - 1740 results (Might equate to 'normal' activity during disinflation cycle - the good times!)

May 11 2021 - 804 results(Indicative of high demand during the Covid helicopter money and furlough phase)

So 5000 today indicates the arse has dropped out of the horsey market, as we would expect!

Edit: pricewise, 3 to 5k per nag in 2018. Very variable in 2021, anything from 3 k up to 20k. Today, between 10 to 20k.

HorsePriceCrash.co.uk ??!!

[Chewing Grass]

2 minutes ago, BadAlchemy said:

I just had a look at that on Wayback Machine. Two previous examples...

May 27 2018 - 1740 results (Might equate to 'normal' activity during disinflation cycle - the good times!)

May 11 2021 - 804 results(Indicative of high demand during the Covid helicopter money and furlough phase)

So 5000 today indicates the arse has dropped out of the horsey market, as we would expect!

Excellent research, its not just the selling medium getting more popular then.

[Loki]

1 hour ago, M S E Refugee said:

I think it is the WEF/Elites behind all of this and I think they have lost control of the situation.

The World is far too complicated for these Pea-Brained Technocrats to comprehend.

Their plans may work in theory but not in practice.

Destroy the old system ready for the new system is my call 

[baffledbyzirp]

1 hour ago, Pip321 said:

The appetite for housing round us (N York’s) is still balmy both rental and sales…..do you see real falls, value inflated away or rather a softening of actual prices. I am finding it difficult to read. London of course a different mattter…I see real falls there 

Re Housing prices and previous dips. Following the GFC housing continued to rise and topped out in Q1 2009, more than 6 months after Lehman's (15th Sept 2008). It is a lagging indicator and reluctant to quick change lower because sales that occur take 3 months to process. Sellers are also reluctant to reduce prices, especially if doing so crystalizes a real or imaginary fiscal loss. Thus prices go up more quickly than they go down. Remember also that the credit crunch had influenced lending for a year prior to the Lehman's event.

The mortgage portfolio inherited by the government following bailing out Northern Rock generated a handsome profit as the vast majority of mortgagors repaid their monthly debts on time. Repossessed homes were also easy to resell. The key issue is interest rates rather than quantum. If we go to 5+% the entire edifice could collapse. However, if rates are suppressed, the market could continue to thrive. Where else are people going to stash all the funny money and financialised wealth generated by printing and asset bubbles? Crypto is bust, growth stocks look wobbly, precious metals are difficult to store and sell, government bonds are puny, corporate bonds are a lottery ticket and cash is going backwards at 10% p.a. 

Regarding the question about further possible attempts to boost the economy via stimulus cheques. Our chancellor did precisely that last week while Biden is talking about forgiving student debt in the US. The total figure exceeds $1.7 Tr. To put that into perspective this is approximately twice the TARP fund agreed in 2008 to 'save the world'. In addition, debtors have had repayment holidays due to Covid, greatly impacting levels of disposable income among graduates since 2020.

Governments around the world face two options;

1. Do the right thing which will cause recession and enormous suffering but allow the system to correct, or,

2. Do the wrong thing which will deflect criticism onto the next schmuck and allow the fairy tale one last chapter by reach for the lever that operates the printing presses.

My money is on door number 2.