Credit deflation and the reflation cycle to come (part 4)

[Yadda yadda yadda]

31 minutes ago, DurhamBorn said:

If i look at lots of different options on my roadmap,that would be one of the worst options.It rewards the things we need to un-reward.Bonkers,and will speed the collapse.Right now they need to use everything to keep the cap at around £2500 and the rest on scrapping net zero crap and building new coal until we can get more nuclear.The next thing is increase the tax allowance to £15k.Freezing that was pure theft from low paid workers.I saw Sunak as bad as Brown,but actually he was worse.Worse than Brown.

Truss needs to give a speech first day and be straight,all governments since Blair was elected have had a disastrous energy policy.Lots is due to the Ukraine war,but most from idiotic left wing thinking and spineless polos.

A thread upstairs linked an article quoting the temporary Chancellor stating that everyone on wages up to £45k needs help. Not sure how that would work. A flat tax rebate? A tapered tax rebate? A grant you have to claim? 

Then there would be the perverse incentives for people on a little more than £45k. Salary sacrifice, etc.

Give everyone a specific sum removed from their bill. Administered by the supply businesses. £90 per month or £1,080 pa. Takes the average bill down to £2,469. Keeps in place the marginal unit cost to encourage people to use less.

Scrap net zero and create a scheme to guarantee a floor price for production from new energy projects. Perhaps an offtake agreement where the Government will share any profits beyond the floor price with the industry. They could also earmark any profits over the floor price to subsidise consumer prices.

[Pip321]

1 hour ago, ONC said:

Nothing new, but still amazes me, in Times today

https://archive.ph/rP0zN

man with £852,000  Interest Only mortgage starts to get worried ….

 

If he can borrow £852k then he can afford a few interest rate increases. Would love to analyse his monthly outgoings and see what he spends on meals out, poor secondary private education, clothes and lifestyle subscriptions etc, list is endless. 

Director of an interiors company…do we think that’s a shop fitters and joinery firm or a soft furnishing and lampshades firm. I wonder🤔

I was around in the repossessions mortgage market in the late 80’s and 90’s. Most of those who we repossessed in North Yorkshire were over extended ‘directors’ with lifestyles to feed.

The article mentions wealthier clients are struggling ie doctors and headmasters….again this was fairly typical in the 90’s. It was people who had high cash flows but no assets….they drive flash cars, owned big cardboard designer homes which they overpaid for…basically people who thought they should be rich due to higher incomes but who hadn’t worked out what savings, tax, pensions and changing economics were all about. They were fucked….and if they lost their job they were proper fucked. 

The lower paid seemed to pull something together and make ends meet (just). I guess in a recession it’s easier to replace a £18k job than a £130k a year job.

In any event I wonder whether we will bail out this guy so he can still pay for his £2000 a month hair gel products. 😉

[M S E Refugee]

EU faces ‘major challenges’ due to anti-Russia sanctions – Borrell https://www.rt.com/news/561669-borrell-eu-sanctions-ukraine/

These people are insane, the higher people's utility bills go up the less they care about Ukraine.

I will be amazed if the EU lasts 18 months.

[Castlevania]

1 hour ago, DurhamBorn said:

If i look at lots of different options on my roadmap,that would be one of the worst options.It rewards the things we need to un-reward.Bonkers,and will speed the collapse.Right now they need to use everything to keep the cap at around £2500 and the rest on scrapping net zero crap and building new coal until we can get more nuclear.The next thing is increase the tax allowance to £15k.Freezing that was pure theft from low paid workers.I saw Sunak as bad as Brown,but actually he was worse.Worse than Brown.

Truss needs to give a speech first day and be straight,all governments since Blair was elected have had a disastrous energy policy.Lots is due to the Ukraine war,but most from idiotic left wing thinking and spineless polos.

My energy usage is around 40% of the cap. A £1500 rebate would be perfect.

[DurhamBorn]

27 minutes ago, Yadda yadda yadda said:

A thread upstairs linked an article quoting the temporary Chancellor stating that everyone on wages up to £45k needs help. Not sure how that would work. A flat tax rebate? A tapered tax rebate? A grant you have to claim? 

Then there would be the perverse incentives for people on a little more than £45k. Salary sacrifice, etc.

Give everyone a specific sum removed from their bill. Administered by the supply businesses. £90 per month or £1,080 pa. Takes the average bill down to £2,469. Keeps in place the marginal unit cost to encourage people to use less.

Scrap net zero and create a scheme to guarantee a floor price for production from new energy projects. Perhaps an offtake agreement where the Government will share any profits beyond the floor price with the industry. They could also earmark any profits over the floor price to subsidise consumer prices.

Id go for the £2.5k like you say.It still encourages people to be careful and cut use.Problem with doing it on tax is it will miss lots of people not on bennies,but maybe living off small savings.Truss seems to want to look like she is taking less though than giving more so she might be tempted into a huge mistake.This isnt a time to mess about,lock at £2.5k spend the rest of the time sorting out energy mess.She will need to cap for business as well or we will see a wipeout come winter.The country is being destroyed because of lunacy of the political class.

[Lightly Toasted]

42 minutes ago, M S E Refugee said:

He is screwed, he has a job that nobody will have any use for in the future and an unaffordable mortgage.

His best option would be to sell up if he can and move to the North of England and buy a decent house for cash.

“It means sacrifices, like perhaps no holiday for a year, and less money for other things like eating out."

[DoINeedOne]

2 hours ago, ONC said:

Nothing new, but still amazes me, in Times today

https://archive.ph/rP0zN

man with £852,000  Interest Only mortgage starts to get worried ….

 

The interesting part for me was wealthy clients selling down other assets to over pay on their mortgages 

[Errol]

 

[Ash4781b]

I think that’s quite reckless for that newspaper to publish that vat cut article. Truss will need to move very quickly. I’m thinking any big purchases for me as a consumer may need to be delayed.

[feed]

26 minutes ago, Ash4781b said:

I think that’s quite reckless for that newspaper to publish that vat cut article. Truss will need to move very quickly. I’m thinking any big purchases for me as a consumer may need to be delayed.

Feels like a focus group "leak" for the something must be done crowd.  Hard to tell if it's the limit of their thinking or it's a distraction.  Time will tell i guess.   

[Plan-b]

2 hours ago, Yadda yadda yadda said:

A thread upstairs linked an article quoting the temporary Chancellor stating that everyone on wages up to £45k needs help. Not sure how that would work. A flat tax rebate? A tapered tax rebate? A grant you have to claim? 

Then there would be the perverse incentives for people on a little more than £45k. Salary sacrifice, etc.

Give everyone a specific sum removed from their bill. Administered by the supply businesses. £90 per month or £1,080 pa. Takes the average bill down to £2,469. Keeps in place the marginal unit cost to encourage people to use less.

Scrap net zero and create a scheme to guarantee a floor price for production from new energy projects. Perhaps an offtake agreement where the Government will share any profits beyond the floor price with the industry. They could also earmark any profits over the floor price to subsidise consumer prices.

Here we go again, Government and Financial solutions that will all use energy not create any, all highly inflationary.

They just can't help themselves trying to fix fundamental energy issues with financial solutions and gimmickry - it won't work.

We need engineering Now, engineers designers brains builders workers labourers, lets start digging some holes and building FF energy; 2 of things we don't have a shortage of is people and coal give them a shovel and lets get moving.

[Axeman123]

34 minutes ago, Ash4781b said:

I think that’s quite reckless for that newspaper to publish that vat cut article. Truss will need to move very quickly. I’m thinking any big purchases for me as a consumer may need to be delayed.

That is just a kite being flown by a special interest group, once the expectation takes hold as you say purchases will be put on hold to wait for the cut. The drop in sales will then be used to campaign for the cut.

[onlyme]

3 hours ago, ONC said:

Nothing new, but still amazes me, in Times today

https://archive.ph/rP0zN

man with £852,000  Interest Only mortgage starts to get worried ….

 

Nothing to see here. So second part been waived with fixes and first part has been leant against.

I think we know what that means.

No stress test and higher multiples.

///////////

Under post-financial crisis rules, banks cannot issue more than 15 per cent of lending at more than 4.5 times income, but have pushed against it as best they can. They also must stress-test borrowers to make sure they can afford rates at 3 per cent above the standard variable rate, although this is not the case when a loan is fixed for five years or more.

[DurhamBorn]

1 hour ago, Ash4781b said:

I think that’s quite reckless for that newspaper to publish that vat cut article. Truss will need to move very quickly. I’m thinking any big purchases for me as a consumer may need to be delayed.

I think from here one thing is obvious.If the government dont help the middle hugely,given polos caused this the Tories will be wiped out at the next election,likely forever because a new party will come through.The idea of cutting 5% off VAT is lunacy in this situation,so bad i dont think it can be true,just drifting things out.I think i can count on one hand when iv agreed with Labour in the last 20 years,but its obvious they are right that the government needs to somehow fund above a certain level.Price controls are a disaster,but that isnt a price control.If Truss just goes for those on bennies then i can say with almost 100% clarity that she will pull my roadmap forward and systemic collapse will happen.There is no way out of it if she pursues anything different than massive intervention.Her idea will simply fuel inflation and pass even more to bennies and retired public sector workers while wiping out small business within a few months.There is no way any government can survive £7k utility bills on workers on £25k.

[Noallegiance]

4 hours ago, Froggy2000 said:

What book is that Noallegiance? Looks interesting!

I have no idea!

#helpful

[MMax]

2 hours ago, M S E Refugee said:

He is screwed, he has a job that nobody will have any use for in the future and an unaffordable mortgage.

His best option would be to sell up if he can and move to the North of England and buy a decent house for cash.

Not quite so stupid, because living in a London property he may have accrued quite a sizeable amount of capital appreciation.  The problem as you highlight is that he may not manage to go on living there without downsizing.  They could of course relocate to the Dordogne or similar, and enjoy the 'good life' with a glass of champagne now and then!

[Phil]

1 hour ago, Plan-b said:

Here we go again, Government and Financial solutions that will all use energy not create any, all highly inflationary.

They just can't help themselves trying to fix fundamental energy issues with financial solutions and gimmickry - it won't work.

We need engineering Now, engineers designers brains builders workers labourers, lets start digging some holes and building FF energy; 2 of things we don't have a shortage of is people and coal give them a shovel and lets get moving.

Not many will want the shovel with the choice being bennies. Choice between eating and a shovel much more palatable. Our engineers are arriving everyday so no worries there. Its the building management companies I feel sorry for. They are constantly moaning about no skilled labour, but never trained any. Like all the governments in my lifetime, they only ever see thier near term in office/the cycle. Probably needs a (non klaus type) reset. Would be nice to start at Westminister, then the council's. 

[XswampyX]

4 minutes ago, Cawn said:

Does anyone think this “special operation”, which I would assume has a start and end date as most things do. Talking to my mate who has a hell of a lot of experience in the military explained to me that these things usually have some planned end date?
Does anyone think we might not get anywhere near these obscene energy costs because something will come in to save the day like a out of the blue peace deal, or some kind of land grab agreement? 

Imagine you were waging a 'war', you take out the means of production and then roll over them.

6 months done!

Imagine you were waging a 'war', where you couldn't take out the means of production and just more weapons and food flowed in from outside.

You have to kill everybody who has the metal to fight for 'freedom'.

Kill Everybody... It's not good.

Then everyone outside the country will cry... but they killed... everyone!

Well DOH!

 

 

[Pip321]

26 minutes ago, Cawn said:

Does anyone think this “special operation”, which I would assume has a start and end date as most things do. Talking to my mate who has a hell of a lot of experience in the military explained to me that these things usually have some planned end date?
Does anyone think we might not get anywhere near these obscene energy costs because something will come in to save the day like a out of the blue peace deal, or some kind of land grab agreement? 
It’s just things like what we are currently seeing in the media, right at the height of mass hysteria like now, all of a sudden like Covid, it’s all of a sudden no big deal? Goes away, problem solved, and whatever it was set out to achieve has been achieved and we will never really know why?
Just September seems a convenient month to see an end to all this bollocks? I mean this guy has a point...

https://www.dailymail.co.uk/news/article-11147521/Ukraine-hits-RMT-boss-Mick-Lynch-claiming-Kyiv-provoked-invasion-Nazi-imagery.html

Ukraine hits out at rail union boss Mick Lynch for claiming government provoked Russia's invasion with 'Nazi imagery'
•    Mick Lynch claimed that Kyiv had provoked Putin by 'playing with  Nazi imagery'
•    Ukraine's government have now hit back at the militant rail union boss 
•    Oleksandr Kubrakov, accused Mr Lynch of losing his 'connection with reality' 
•    Ukraine's government yesterday hit back at militant rail union boss Mick Lynch for claiming that Kyiv provoked Russia's invasion by 'playing with Nazi imagery'.
•    Oleksandr Kubrakov, Ukraine's infrastructure secretary, accused Mr Lynch of losing his 'connection with reality' by peddling Kremlin propaganda.
•    He said the RMT boss should instead be expressing solidarity with murdered Ukrainian rail workers, who have provided a lifeline for millions of fleeing refugees. Mr Lynch has denied repeating Kremlin propaganda.

The comments are even worse. Media does my head in and the readers more so.

More generally the papers, media and BBC are plastered with news on energy and inflation. The cry for government help and workers (and yes, those benefit claimants too) needing more pay/money has not been so loud and consistent in years. Even Sir Saint Martin Lewis OBE is shouting from the roof tops and Save the Children getting involved.

Yet no one seems to be asking the obvious question why did the West turn what was a ‘terrible humanitarian physical crisis in Ukraine’ (happy to stick with a decent western narrative on that) into an economic war with the Russians who have all the gas and oil. And then start moaning about energy prices and inflation. 

It’s like telling the dinner lady she’s a fat ugly cow then complaining you are hungry 20 minutes later. 

It is hugely frustrating. The narrative is Putin is using energy as a weapon…yeah, no shit, you froze his assets and knicked some yachts, what did you think was going to happen? He’s not a great friend so I doubt he would make a great enemy. 

I believe now the only solution is for Germany to pick up the phone quietly, apologise to the Ruskies and agree to stop sanctions (apart from the odd political type stuff that doesn’t mean anything economically). Obviously they will also agree with Russia to continue to publicly condemn them for the invasion.

Otherwise I just think the UK and EU are being massively weakened so the US can strengthen its position in Europe and Russia/China can strengthen their positions too.

And yet the best we can muster is strikes, protests, awful narratives and all in the wrong direction.

And try put that in one of the BBC comments and you are a Putin loving communist.

I honestly think the EU needs to ‘pivot’ or it is bollocked. 

[Yadda yadda yadda]

1 hour ago, Cawn said:

Does anyone think this “special operation”, which I would assume has a start and end date as most things do. Talking to my mate who has a hell of a lot of experience in the military explained to me that these things usually have some planned end date?
Does anyone think we might not get anywhere near these obscene energy costs because something will come in to save the day like a out of the blue peace deal, or some kind of land grab agreement? 
It’s just things like what we are currently seeing in the media, right at the height of mass hysteria like now, all of a sudden like Covid, it’s all of a sudden no big deal? Goes away, problem solved, and whatever it was set out to achieve has been achieved and we will never really know why?
Just September seems a convenient month to see an end to all this bollocks? I mean this guy has a point...

https://www.dailymail.co.uk/news/article-11147521/Ukraine-hits-RMT-boss-Mick-Lynch-claiming-Kyiv-provoked-invasion-Nazi-imagery.html

Ukraine hits out at rail union boss Mick Lynch for claiming government provoked Russia's invasion with 'Nazi imagery'
•    Mick Lynch claimed that Kyiv had provoked Putin by 'playing with  Nazi imagery'
•    Ukraine's government have now hit back at the militant rail union boss 
•    Oleksandr Kubrakov, accused Mr Lynch of losing his 'connection with reality' 
•    Ukraine's government yesterday hit back at militant rail union boss Mick Lynch for claiming that Kyiv provoked Russia's invasion by 'playing with Nazi imagery'.
•    Oleksandr Kubrakov, Ukraine's infrastructure secretary, accused Mr Lynch of losing his 'connection with reality' by peddling Kremlin propaganda.
•    He said the RMT boss should instead be expressing solidarity with murdered Ukrainian rail workers, who have provided a lifeline for millions of fleeing refugees. Mr Lynch has denied repeating Kremlin propaganda.

It is either a plan or one of history's most monumental fuck ups.

Sanctioning Russia's ability to take payment for oil and gas was inevitably going to lead to them shutting down oil and gas supply. Even if there is a convoluted work around. The sanctions on swift payments also forced the setting up of an alternative. An event that brings forward a formalised multi-polar trading system or cold war. The consequences of the sanctions were so obvious that they were either desired, considered a cost acceptable to pursue another aim or an indication of massive hubris.

If we presume it is a plan then what is the end game? The obvious plan is that of the WEF and Klaus Schwab. Is that misdirection? Why would you publicise your dastardly schemes? Being British it is a bit concerning that western Europe is resource poor. Clearly I'm excluding coal there but it could take years before the population is happy to burn coal such has been the end of the world propaganda. Plus infrastructure would need to be built out. Could the plan be a joint US - Russia - China scheme to wreck Western Europe and take the resource spoils? Logically Russia would be better off with the EU as a customer bidding up resource costs. However, throw them a sweetener and they might sign up. Perhaps the UK left the EU precisely because this was going to happen? It could also be that the Schwab plan is simply there to make the final solution look less awful.

Of course it could still be a European fuck up.

Tldr: I don't know!

[marceau]

14 minutes ago, Yadda yadda yadda said:

It is either a plan or one of history's most monumental fuck ups.

Sanctioning Russia's ability to take payment for oil and gas was inevitably going to lead to them shutting down oil and gas supply. Even if there is a convoluted work around. The sanctions on swift payments also forced the setting up of an alternative. An event that brings forward a formalised multi-polar trading system or cold war. The consequences of the sanctions were so obvious that they were either desired, considered a cost acceptable to pursue another aim or an indication of massive hubris.

If we presume it is a plan then what is the end game? The obvious plan is that of the WEF and Klaus Schwab. Is that misdirection? Why would you publicise your dastardly schemes? Being British it is a bit concerning that western Europe is resource poor. Clearly I'm excluding coal there but it could take years before the population is happy to burn coal such has been the end of the world propaganda. Plus infrastructure would need to be built out. Could the plan be a joint US - Russia - China scheme to wreck Western Europe and take the resource spoils? Logically Russia would be better off with the EU as a customer bidding up resource costs. However, throw them a sweetener and they might sign up. Perhaps the UK left the EU precisely because this was going to happen? It could also be that the Schwab plan is simply there to make the final solution look less awful.

Of course it could still be a European fuck up.

Tldr: I don't know!

For the record I think they're clowns. People who've never done anything tangible or productive in their lives, with advisors who've never done anything tangible or productive in their lives. They fuck up everything they touch.  They inherited a monumentally wealthy, stable and powerful system; so it took them a long time to ruin it, but ruin it they have.

Even if I'm wrong though, and they are 4d-chess supergeniuses after all, the goal for everyone else is still the same. Get rid of them. Get them out of power by whatever means necessary.

[Democorruptcy]

3 hours ago, DurhamBorn said:

I think from here one thing is obvious.If the government dont help the middle hugely,given polos caused this the Tories will be wiped out at the next election,likely forever because a new party will come through.The idea of cutting 5% off VAT is lunacy in this situation,so bad i dont think it can be true,just drifting things out.I think i can count on one hand when iv agreed with Labour in the last 20 years,but its obvious they are right that the government needs to somehow fund above a certain level.Price controls are a disaster,but that isnt a price control.If Truss just goes for those on bennies then i can say with almost 100% clarity that she will pull my roadmap forward and systemic collapse will happen.There is no way out of it if she pursues anything different than massive intervention.Her idea will simply fuel inflation and pass even more to bennies and retired public sector workers while wiping out small business within a few months.There is no way any government can survive £7k utility bills on workers on £25k.

The energy price cap is a price control so how is capping a cap to 2.5k not a price control?

The governbankment has got to fund it "somehow", in other words keep the pretence going that we can afford to do what we can't really afford to do? More free money for everybody? To keep people like those earlier in the thread in their 852k mortgaged house that they can't really afford?

If my pounds are going to be devalued again to bailout people like that, where can I sign for the systematic collapse option? I'll probably be a big loser but if I'm going to be a big loser anyway, I might as well take my chances. 

 

[feed]

https://www.teletrader.com/ukto-run-out-of-funds-to-help-ukraine-by-year-end-reprot/news/details/58511920?internal=1

UK to run out of funds to help Ukraine by year-end 

The United Kingdom will run out of resources to provide assistance to Ukraine before year-end, the Sunday Times reported citing a source with the British Department of Defence.

The source also claimed the new government will have trouble supplying Kiev with weapons once Prime Minister Boris Johnson's successor takes office.

In late June, the UK announced it will provide a further £1 billion in military support to Ukraine in addition to the £1.5billion of humanitarian and economic support provided to the country since February.

 

[Noallegiance]

[Calcutta]

I don't really watch the news and certainly don't have the time to study it. If we're looking for the end game, looking for the plan re: Ukraine, then it would be interesting to note who was the first to start with the sanctions? 

In the immediate time after the invasion who was it that stuck their neck out and started the unusually extreme sanctions? 

Putin killed three people in Salisbury and contaminated the city centre. I'm sure there were some angry letters sent but nothing really happened. 

IMO to find the plan behind what's going on we need to identify who fired the first shot.

If it was the US, came out shooting like yosimite Sam then alright, they've taken the EU for cunts and are dragging them down to fuck the Germans. Excellent. 

If the Europeans or the British were the first in line to cut their own gas supplies then it would suggest more of a planned, western world as a whole, strategy to put up a new iron curtain and stop the rise of China before it was too late. 

Either way there was a plan, look at the reaction. I'm all up for politicians and the media being stupid but this is a global great game with thousands of people involved. They provoked putin on purpose, as soon as he went in they were ready with all these sanctions nobody had ever even considered before. No way this wasn't game planned. 

Where that plan ends up is where we need to find. And to get there, IMO we need to remember the timeline and see who went hard first.