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

[stoobs]

2 hours ago, JohnnyB said:

9.1% inflation and rising, caused by money printing 

Beeb:

Quote

The move was the fifth consecutive rise, pushing rates to the highest level in 13 years. However, when inflation was last at 9.1% in March 1982, interest rates were 13%, Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said.

But an interest rate of 1.25% is considered adequate these days. 

[Herby]

17 hours ago, Cattle Prod said:

Critical product is diesel. You need heavy oil to make diesel, and it's all getting lighter as fields mature and discoveries get gassier. No diesel, no transport, no food, no society. Shortages already begun.

If you mean equipment to produce oil, there are lots of choke points. Diesel, steel, frac sand, people.

The first time, heard adverts on the radio today for McDonald's actively looking to recycle vegetable oil for use in diesel. They mentioned a drop off points for oil. Not sure if that means the general public / other businesses  can also "chip in". 

[Hardhat]

Forgive me if this is a dumb question, but how do you make a fag with less nicotine in it? Different breed of tobacco plant? Shorter stick??

[M S E Refugee]

Europe told to be ready for total cut of Russian gas https://www.rt.com/business/557599-europe-russian-gas-cut/

 

[marceau]

1 hour ago, HousePriceMania said:

At least Japan shows how long the QE/0% IRs scam can go before the currency collapses.

We have 10 years or breathing space I reckon 

Japan got away with it for the same reasons we did; lots of global supply to soak up all the excesses.

Nations don't operate in closed systems. Now supply has dried up, it's over for everyone simultaneously. The only thing that changes from nation to nation is how good/bad the starting position is. This determines how much productive capacity and monetary/fiscal flexibility they can utilise to compete for dwindling resources. 

[Bricormortis]

12 minutes ago, Hardhat said:

Forgive me if this is a dumb question, but how do you make a fag with less nicotine in it? Different breed of tobacco plant? Shorter stick??

In the 70's there was NSM which stands for New smoking material. They added it to some fags. No one liked it. It did make you need to smoke more / chain smoke. 

 

[HousePriceMania]

 

[marceau]

8 minutes ago, HousePriceMania said:

 

Blow-off top.

[No One]

1 minute ago, marceau said:

Blow-off top.

I read just now that the government is planning to remove LTI as a requisite for mortgages. 

The Bank's Financial Policy Committee (FPC) judged that the LTI flow limit is likely to play a stronger role than the affordability test in guarding against an increase in overall household indebtedness and the number of highly indebted households in a scenario of rapidly rising house prices.

Therefore the LTI limit without the affordability test, but alongside the wider assessment of affordability required by the Financial Conduct Authority (FCA)'s responsible lending rules, should deliver the appropriate level of resilience to the UK financial system, but in a simpler, more predictable and more proportionate way, the Bank said.

[Boon]

For a house price entering the stats at April 2022, that price most would have been agreed somewhere in 2021, maybe even before the end of the stamp duty holiday (Sept 2021)

So basically before any interest rate rise, a scenario where inflation was still predicted to be transitory, the arse-end of higher furlough incomes, maybe maximum FOMO.

Given that higher interest costs and higher bills have only recently bitten it may be until 2023 until the momentum dies on the graph.

Or have I got it wrong somewhere?

 

[sancho panza]

2 hours ago, Foor said:

https://185.79.236.174/news/557580-biden-fails-putins-price-hike/

Just 11% of Americans believe Russian President Vladimir Putin is to blame for record high gas prices in the US, according to a Rasmussen poll published on Tuesday. The majority instead blame US President Joe Biden.

More than half (52%) of respondents to the Rasmussen poll conducted last week pointed to Biden’s poor energy policies as the reason gas has become unaffordable, meaning the administration’s “Putin’s price hike” narrative does not appear to be catching on.

Biden says #putinpricehike, but voters disagree. Who is to blame?

All voters: Biden (52%)

Republicans: Biden (80%)

Democrats: Oil Companies (46%)

Independents: Biden (54%)

 

Those who blame neither Biden nor Putin point their fingers at oil companies, with 29% of respondents suggesting the industry is leveraging the current geopolitical instability to jack up its prices.

Perhaps aware that his “Putin’s price hike” narrative no longer holds water, Biden has been leaning toward blaming oil and gas companies for the ruinous costs of fueling up, recently accusing the industry of “making more money than God.” The president has insisted that oil companies are deliberately holding back from drilling “because they make more money not producing more oil.” 

I don't think Biden will get away with this that easily.Genuienly,looking at both the US leadership and UK,I can't actually think of a more incompetent govt for either.The worst leaders at teh worst time.But looking at the political classes more broadly,there are a lot of similarities between the 'let them eat cake' EU leaders and the 'let them eat cake' US/UK leadesrhip

 

1 hour ago, marceau said:

Japan got away with it for the same reasons we did; lots of global supply to soak up all the excesses.

 

I think the reasons were different but the end result isn't.

 

[marceau]

50 minutes ago, No One said:

I read just now that the government is planning to remove LTI as a requisite for mortgages. 

The Bank's Financial Policy Committee (FPC) judged that the LTI flow limit is likely to play a stronger role than the affordability test in guarding against an increase in overall household indebtedness and the number of highly indebted households in a scenario of rapidly rising house prices.

Therefore the LTI limit without the affordability test, but alongside the wider assessment of affordability required by the Financial Conduct Authority (FCA)'s responsible lending rules, should deliver the appropriate level of resilience to the UK financial system, but in a simpler, more predictable and more proportionate way, the Bank said.

I think this is just part of the paper trail from govt shifting liabilities back to the banks, rather than an attempt to prop up prices. There won't be any more bail outs and the banks know it.

[HousePriceMania]

57 minutes ago, marceau said:

BlowFuck-off top.

 

[sancho panza]

1 minute ago, marceau said:

I think this is just part of the paper trail from govt shifting liabilities back to the banks, rather than an attempt to prop up prices. There won't be any more bail outs and the banks know it.

Agreed.There jsut isn't the space for ZIRP/QE this time.Know this is old news but when you see it stated like this,it pretty mcuh confirms what you've said.

[Yadda yadda yadda]

3 hours ago, DurhamBorn said:

I used to smoke.Less nicotine,id smoke more fags,doubt Biden will have much power after the mid-terms anyway,the public wont forgive inflation in gas prices.Amazing that the first thing he did in office was similar to the first thing you say to your date "you look fat in that" in banning the new pipelines ensuring you were dumped as soon as you went to the toilet.

A bird once asked me if her bum was fat. I said no but she could do with losing a bit of weight from her belly. Compounded it by pinching more than an inch to demonstrate. When I woke up in the morning she had gone off to sleep in another bed. She came back and I banged her again but never saw her afterwards. Just as well as she was a bit mental.

[sancho panza]

44 minutes ago, Boon said:

For a house price entering the stats at April 2022, that price most would have been agreed somewhere in 2021, maybe even before the end of the stamp duty holiday (Sept 2021)

So basically before any interest rate rise, a scenario where inflation was still predicted to be transitory, the arse-end of higher furlough incomes, maybe maximum FOMO.

Given that higher interest costs and higher bills have only recently bitten it may be until 2023 until the momentum dies on the graph.

Or have I got it wrong somewhere?

 

There's a huge lag isn't there?I still think the general public believes in brix n mortar as an investment class,it will take som ebig headlines to shake the faith of the last fifty years.

[marceau]

5 minutes ago, sancho panza said:

Agreed.There jsut isn't the space for ZIRP/QE this time.Know this is old news but when you see it stated like this,it pretty mcuh confirms what you've said.

ZIRP can't be done. QE still can. External vs internal focus. Bond buyers and currency markets know who will be taking the pain. UK govt still has room in any plan that fucks us rather than fucks them. Sad but true.

[marceau]

20 minutes ago, sancho panza said:

I think the reasons were different but the end result isn't.

The conditions have been global, the policies have been national.

Japan had different priorities and charted a different course, but the benign conditions of credit expansion, globalisation & deregulation gave them the space to do so. At the same time it also gave us the space to open up a welfare/public sector black hole and pretend that John Lennon's Imagine was a viable social foundation. Horses for courses.

[kibuc]

Alexco with an operational update today.

I'll save you details and just gonna say brace for impact.

Mind you, I'll still be adding when it reaches silly levels - should not be long tbh.

 

[Ash4781b]

5 hours ago, JohnnyB said:

9.1% inflation and rising, caused by money printing 

Sorry if missed it but Sunak seems to be re-confirming triple lock state pension. Clearly there’s an argument about how far state pension actually goes and how political it is (with energy costs rising as fast as they are)

[BWW]

1 hour ago, M S E Refugee said:

Europe told to be ready for total cut of Russian gas https://www.rt.com/business/557599-europe-russian-gas-cut/

 

Does anyone have the data for when this causes blackouts either for factories or households.

assume there are known reserves and 60% of ns1 gone will be causing stored volumes to go down.

saw an article directed at euro consumers saying please conserve gas so you have some in winter. bizarre message.

[BWW]

2 minutes ago, Ash4781b said:

Sorry if missed it but Sunak seems to be re-confirming triple lock state pension. Clearly there’s an argument about how far state pension actually goes and how political it is (with energy costs rising as fast as they are)

what % will drop out before sept ? just need to make this years summer no.s low to get the sept no down ifthere were chunky increases last yr.

[Bricormortis]

45 minutes ago, sancho panza said:

I don't think Biden will get away with this that easily.Genuienly,looking at both the US leadership and UK,I can't actually think of a more incompetent govt for either.The worst leaders at teh worst time.But looking at the political classes more broadly,there are a lot of similarities between the 'let them eat cake' LET THEM INSTALL HEAT PUMPS EU leaders and the 'let them eat cake'  LET THEM INSTALL HEAT PUMPS  US/UK leadesrhip.

 

Updated that to 2022 for you. 

[marceau]

38 minutes ago, Ash4781b said:

Sorry if missed it but Sunak seems to be re-confirming triple lock state pension. Clearly there’s an argument about how far state pension actually goes and how political it is (with energy costs rising as fast as they are)

They still think that PAYE will suck it up and carry the burden, and while it won't replace lost revenue elsewhere, it will at least remain a stable foundation in the eyes of the market. It's acted in this manner for them since WW2, so why wouldn't they continue to think it? Pensions, public sector, migrant and welfare free-for-all continues; Mr & Mrs Salary get shafted.

There's evidence to suggest that this time they could be wrong. Of course, we only get to see such data long after the event, but real terms decline in the PAYE share of govt revenues could see a rapid policy readjustment (or a panic, as it's more commonly known).

[Pip321]

16 minutes ago, Ash4781b said:

Sorry if missed it but Sunak seems to be re-confirming triple lock state pension. Clearly there’s an argument about how far state pension actually goes and how political it is (with energy costs rising as fast as they are)

I think they are reviewing the age eligibility too ie increasing it….so workers can pay for those already retired, the retired get 9% and the workers have to wait another few years for their pension.

I understand why pension age needs increasing….but if I were 25 I would be thinking very carefully about how hard I was prepared to work to pay for everyone else to not have to work at all, Particularly when I would doubt ever seeing a state pension in the future.