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


spunko

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3 hours ago, DurhamBorn said:

Notice how quietly our telcos are starting to deliver while everything is shaky.TEF doing very nicely indeed now slowly creeping higher.BT keeps catching a bid,VOD is seeing more and more cunts (Blackrock) appear on the shareholder register.Even Turkcell has crept up a bit iv 3 ladders in out of 5 so up or down suits me.

Government might be a risk trying to force them to hold down prices,but a £30 phone bill increasing at 10% means nothing when an energy bill of £200 a month is going up at 50%.

Something yielding 6% that can deliver 4%pa growth could end up being the best sector of them all to protect capital.Only mistake was capital could of grown much more in the other inflation areas then be moved,but looking good at the moment.

Mobile phones/broadband are crack.

RMT strike -  trains or the internet? Pick one.

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1 hour ago, sancho panza said:

Lot of public sector workers are worse off as well.There's a huge difference between people on legacy contracts and new starts in both the NHS and police.Councils are councils,but my expereince of teh NHS is that it runs at it's most basci level on cheap labour.Same with with new police starters @Lightscribe

Sadly,I think you're wrong LS.I think Occam's razor says the msot liekly explanation is that they haven't got a clue what they're doing or are operating with a playbook written by academics with little real world experience and a fundamental belief that rpivate debt levels play no part in economic activity......

They're lurching from one fiasco to another in a timespan of months.

There's nothing coordinated about their stupidity

In a previous life I bumped into a lot of Tory MP's......very uninspiring bunch and dare I say it,totally out of touch with the real world in msot cases.There were one or two that were switched on but they were the exception that proved the rule.

I echo SP, there. Do not confuse serving emergency service workers, with retired public sector civil service workers and officers. They won’t be getting any pay rises in line with inflation (mine was frozen last year), so it’s a hard straight 11% inflation to the chin when your at the top of pay scale banding after so many years.

The serving emergency service workers then have the delight of their contributions going up to pay for all the retirees, with their own goalposts being moved much further away so that they never actually receive theirs. So not much better off than everyone else paying for it.

@sancho panza Well I’m unsure whether that’s any better or worse SP.

Knowing that the whole western global leadership is unfit for office and is setting the economy on course for kamikaze through sheer ineptitude and incompetence? Scary, then God help us. We may as well start learning Russian and Mandarin now.

Or indeed performing to a necessary set of milestones to address a failing economic monetary system whilst arriving at a perceived solution, (CBDCs). People revolt, revolution, civil war.

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1 hour ago, sancho panza said:

Lot of public sector workers are worse off as well.There's a huge difference between people on legacy contracts and new starts in both the NHS and police.Councils are councils,but my expereince of teh NHS is that it runs at it's most basci level on cheap labour.Same with with new police starters @Lightscribe

Sadly,I think you're wrong LS.I think Occam's razor says the msot liekly explanation is that they haven't got a clue what they're doing or are operating with a playbook written by academics with little real world experience and a fundamental belief that rpivate debt levels play no part in economic activity......

They're lurching from one fiasco to another in a timespan of months.

There's nothing coordinated about their stupidity

In a previous life I bumped into a lot of Tory MP's......very uninspiring bunch and dare I say it,totally out of touch with the real world in msot cases.There were one or two that were switched on but they were the exception that proved the rule.

Its the DB pension, thats all.

There is also a lot of baggage in the various public sector orgs. Maybe nominally low paid baggage,. but still expensive - cost of housing/bum on seat, sick pay/replafement etc etc.

Even with the adjustment to career average and later SRA (7 more for wimmin),  the public sector pensions will suck up an ever increasing lump of UKGOV tax.

Its a mess. And should have al been sorted out in the 90s, 00s at a push.

It wasnt.

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6 minutes ago, spygirl said:

Its the DB pension, thats all.

There is also a lot of baggage in the various public sector orgs. Maybe nominally low paid baggage,. but still expensive - cost of housing/bum on seat, sick pay/replafement etc etc.

Even with the adjustment to career average and later SRA (7 more for wimmin),  the public sector pensions will suck up an ever increasing lump of UKGOV tax.

Its a mess. And should have al been sorted out in the 90s, 00s at a push.

It wasnt.

And add 'working practises too - esp the sick leave.

Remove access to benefits and free public servces ... poof! demand for NHS and schooling will drop massively in London and elsewhere.

 

 

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22 hours ago, Talking Monkey said:

Won't it be a struggle for the BRICs to build a service economy DB if oil really gets going in price later in the decade, won't discretionary incomes in those countries be under pressure. 

I've heard/read several commentators say that EMs economies will struggle, from here onward, as they attempt to transition from export led economies to consumer ones. Apparently it will be the smaller EMs, eg Vietnam etc, that will really suffer. Victor Shvets (I think his dystopian outlook is 'interesting' given he heads up Macquarie Bank Asia) for example suggests US/West will eventually need to embark on a new Marshall Plan type rescue package across Asia, otherwise real risk of mass migrations from East to West. 

Edited by JMD
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1 hour ago, DurhamBorn said:

https://www.telegraph.co.uk/business/2022/06/23/worlds-favourite-money-making-strategy-dead/

The Telegraph stealing out work again without the decency to acknowledge the fact.I think this is one of the best calls the thread has made alongside the energy call.Nobody else understood the cycle would hit both.The article is wrong of course in nowhere to hide,we have done very well as the inflation shares mostly way outperformed.

I think the 60/40 route is even worse for those in drawdown.Add on 4% drawdown,10% inflation and my forecast those type of funds could empty in 10 years look a maybe.Property will roll over next.

If government wants everyone not working to get 10% the workers will demand the same minimum and will strike for it.Interest increases are only getting started.

in the uk, has a retail investor not always been better off with the bond allocation in nsi or has that had much lower returns on average?

Seems to me its a gilt if thats defined as gov backed deposit. also cannot go down as it.s a savings product albeit low interest. importantly not subject to over 85k bail in confiscations like a bank savings product.

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1 hour ago, spygirl said:

Its the DB pension, thats all.

There is also a lot of baggage in the various public sector orgs. Maybe nominally low paid baggage,. but still expensive - cost of housing/bum on seat, sick pay/replafement etc etc.

Even with the adjustment to career average and later SRA (7 more for wimmin),  the public sector pensions will suck up an ever increasing lump of UKGOV tax.

Its a mess. And should have al been sorted out in the 90s, 00s at a push.

It wasnt.

The career average is a misnomer, and over a period of wage growth lagging inflation is hugely expensive. 

It’s simply a series of cash flows where you obtain a fraction (typically 1/60) of your salary for each completed year at retirement. However, every single completed year is CPI linked, even if you don’t get an inflation linked pay rise this year.

In a low growth environment that’s far better for your average public sector employee who’s happy to go through the motions than a final salary pension.

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2 hours ago, ThoughtCriminal said:

Putin continues to piss himself laughing

dutch tv report about this was asking whether qatar gas is any more ethical than russia gicen the 000's of immigrant labour deaths. also reporting on lpg terminal investment which needs min 10 year contracts to repay investment.

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21 minutes ago, BWW said:

dutch tv report about this was asking whether qatar gas is any more ethical than russia gicen the 000's of immigrant labour deaths. also reporting on lpg terminal investment which needs min 10 year contracts to repay investment.

Maybe the world needs to decide/realise that the business of keeping the world running is a trade off for how countries behave within their own borders.

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22 hours ago, Democorruptcy said:

GB News Farage at 7pm, now discussing what's the point of working when bennies getting inflation rises.

Am I the only one thinking there has to be a new political party emerging from all this madness happening all around? After all there must now be very many political homeless searching for temporary sanctum, or at least somewhere or something to help sustain their sanity's! - Not asking for much, I think I'm actually setting a very low bar...  However that's the risk, and where the (political) rot begins to set in. Hmm, I guess I need to be careful what I wish for?!

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7 minutes ago, JMD said:

Am I the only one thinking there has to be a new political party emerging from all this madness happening all around?

Surely that will be the next stage of the Nigel Farage project. He is building a coalition of dispossesed voters around issues like the ECHR, inflation, dingy drivers etc. Farage is also not condemning the strikes, making him a threat to Labour too.

BJs "wedge week" actually makes more sense as an attempt to head this off than it does as an attack on Labour. Credit where it is due though, party-gate is well and truly in the rear-view mirror.

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Democorruptcy
52 minutes ago, JMD said:

Am I the only one thinking there has to be a new political party emerging from all this madness happening all around? After all there must now be very many political homeless searching for temporary sanctum, or at least somewhere or something to help sustain their sanity's! - Not asking for much, I think I'm actually setting a very low bar...  However that's the risk, and where the (political) rot begins to set in. Hmm, I guess I need to be careful what I wish for?!

You might set a low bar for a new political party but the costs involved to make one a contender are very high bar.

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