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

[Axeman123]

42 minutes ago, CannonFodder said:

Why not debt servitude?

True, but plenty of grads already run straight off to start a new life abroad in order to duck their student loan. Are BRICS likely to dock the wages of expats for us?

48 minutes ago, belfastchild said:

What you mean like covid? Or carbon taxes? Or just plain expensive to get anywhere which you cant pay with your ubi card?

Walls without the actual wall.

More like a net than a wall, ie a percentage will still wriggle through. Unless you have exit visas or essentially eliminate recreational air travel, people would save up for a holiday and not come back.

Imagine the customs documentary: "why have you brought printouts of your CV and professional qualifications in your suitcase if this is just a holiday?", only instead of it being dodgy people trying to get into Oz on a tourist visa it would be families trying to get out of the west on one!

[Long time lurking]

2 minutes ago, Lightscribe said:

financial services etc could all be next in line (especially with the digital £).

That`s been digital for years ,the reason for the digital rush is the central bank/inter bank and international exchange mechanisms 

Cash will always exist (it`s almost irrelevant in the scheme of things already) ,when they talk about CBDC its all about doing away with end of the day settling whereby your bank settles with the bank of the company you just spent your money at ,it`s not a currency it`s just a transaction mechanism that will go instantly from one bank to the other 

It`s the same for international payments whereby anything that goes through SWIFT has to go through it`s Belgium exchange before it gets to the destination which can take days  

I`m not saying it could not be used for more nefarious intentions ,but all i see is the western banking system desperately trying to catch up with a far more efficient system that China already have in place ,in the mist of WW3 the economic war 

[DurhamBorn]

2 hours ago, Harley said:

TBH, you don't need macro, just common sense, morals, patriotism, honesty, critical thinking,......you know, all the good stuff those who can have.

True,but they need macro.The problem is over 40 years we have had one cycle,so macro slowly became redundant because nothing changes,in their minds of course.So it became Economists.They think its the same thing,but it isnt.I was talking to a very very senior Economist late last year and he mentioned "the macro situation",but he wast talking macro,it was economics.The above as you say is crucial too,but they need putting in front of them the macro path,mainly the cross market affects.They are using economic models,not macro ones.Thats why nothing is working.Im convinced they think they need to keep demand up and the ship will correct.

"This ship cant sink","its made of iron sir,i assure you it can,and will".

In simple terms this is a cost push cycle and they are responding with demand pull.A complete disaster.They are eating up saved capital trying to keep consumption up when its clear consumption needs to fall for a while as primary then secondary production is built up.Its incredible how far wrong they are.They couldnt be more wrong.What will change that?.I see nothing at the moment.Very very disturbing.

 

[CannonFodder]

41 minutes ago, Long time lurking said:

That is the trick there`s still good money in that game if you know the area you buy in a good mate is doing very well with his pub because he was the last man standing in the local area ,due to all the Brewery pubs going tits up ,he bought one of them and it`s thriving as a free house ,IMO it`s all about timing and location 

I dont think any pub that I ran would make any money though I could write off my alcoholism against tax 🤔

[Long time lurking]

13 minutes ago, Axeman123 said:

More like a net than a wall, ie a percentage will still wriggle through. Unless you have exit visas or essentially eliminate recreational air travel, people would save up for a holiday and not come back.

Imagine the customs documentary: "why have you brought printouts of your CV and professional qualifications in your suitcase if this is just a holiday?", only instead of it being dodgy people trying to get into Oz on a tourist visa it would be families trying to get out of the west on one!

This could well be part of the Net Zero con ,what you describe would cause massive unrest and suspicion 

Are they using the same psyop they used with covid but this time net zero to convince people they are doing for there own good and to save the planet basically guilt tripping people into believing this is the reason why it`s so hard/unethical to leave 

[CannonFodder]

1 minute ago, Long time lurking said:

This could well be part of the Net Zero con ,what you describe would cause massive unrest and suspicion 

Are they using the same psyop they used with covid but this time net zero to convince people they are doing for there own good and to save the planet basically guilt tripping people into believing this is the reason why it`s so hard/unethical to leave 

Outside blighty is a scarey place of protests and wars innit.

[Long time lurking]

2 minutes ago, CannonFodder said:

I dont think any pub that I ran would make any money though I could write off my alcoholism against tax 🤔

It`s not a game that interests me that's for sure ,you will not find an industry with more fucked up working hours 

[CannonFodder]

3 minutes ago, Long time lurking said:

It`s not a game that interests me that's for sure ,you will not find an industry with more fucked up working hours 

When I was younger- romantic notion of polishing the glass chatting to regulars.

Of course then I realised the alco who drinks 40 pints of your beer before throwing up in the toilets is your best customer if you dont mind hosing down the tiles for £200

[Axeman123]

3 minutes ago, Long time lurking said:

This could well be part of the Net Zero con ,what you describe would cause massive unrest and suspicion 

Are they using the same psyop they used with covid but this time net zero to convince people they are doing for there own good and to save the planet basically guilt tripping people into believing this is the reason why it`s so hard/unethical to leave 

Fair point, but still; if we can't find enough talent here for the cycle ahead, we will have to lure it here. Would you accept a contract in North Korea? 

IMO net zero won't stop the well paid holidaying in Maritius, it will however stop plebs going all-inclusive to sharm-el-sheik for buttons. The word net is the clue, people will be taxed to offset the (doctrinally calculated) emission associated with the activity. Just as congestion charging etc is taking far more 20 year old citroens off the road than brand new Range Rovers, so ordinary Joe will bear the brunt of reduced flying when he gets priced out.

[Long time lurking]

1 minute ago, CannonFodder said:

Outside blighty is a scarey place of protests and wars innit.

To be honest i think Net Zero is more about having an excuse in place for the harsh economic times that might lay ahead ,along with Russia did it ,it might even be a way of pushing the west towards renewables due the fact they know we will be fucked if the BRICS succeed ,as in it was our choice rather than being outplayed 

All i know for sure though is ,it`s got fuck all to to with climate change /global /warming/CO2

[Lightly Toasted]

1 hour ago, CannonFodder said:

Zanu was funded, armed and trained by China in the bush war. See link below.

A lot of colonial independence had chinese or soviet hands in it. It was a way to weaken the west during the cold war. Any independence movement attracted support. Enemy of my enemy is my friend.

China has being doing a number on the west for years. For unknown reasons our history books dont talk about it like the time China killed 30,000 US troops in the 1950s.

https://en.m.wikipedia.org/wiki/Rhodesian_Bush_War

All good fun I guess.

The communist bloc as a whole supported the "front line states" opposing Rhodesia and South Africa. But the West played along through sanctions, donations and media vilification. Ian Smith blamed Britain in particular:

...

The cynicism of Perfidious Albion is reflected in a conversation with Harold Wilson, the Labor prime minister of the '60s, recorded by Smith. Said Wilson: "For you and me to come to an agreement is no problem. What we have to do is produce an agreement which I can sell to the rest of the world, and in particular to the OAU." Smith shot back: "That bunch of communist dictators." The response from Wilson: "You cannot divorce yourself from the world we live in."

Smith found that the Tories who alternated in power at Whitehall during the quarter-century when Rhodesia's fate was decided were not all that different from the socialists. "If we were not faced with Harold Wilson and the Labour Party using Rhodesia as a pawn in order to appease the OAU," Smith writes, " it was Ted Heath and the Conservatives using us as a bargaining chip in order to win votes in the House of Commons."

Smith did experience momentary elation when Margaret Thatcher became prime minister in 1979. But she soon "reneged on her promise of recognition [of the Muzorewa government] under pressure from Nigeria and Australia." The Iron Lady, in her memoirs, coldly ignores Smith and, with characteristic candor, admits that Muzorewa had fulfilled all the conditions for international recognition but that Soviet-backed African states insisted on Mugabe, who was continuing the bloody guerrilla war. "I was well aware that what the people of Rhodesia needed above all was peace and stability," she writes, in justifying her abandonment of democracy.

Lady Thatcher concludes that "it was sad that Rhodesia/Zimbabwe finished up with a Marxist government in a continent where there are too many Marxists maladministering their countries' resources," but begs off by pleading " political and military realities." Those "realities" were pressed upon her by her deplorable foreign minister, Lord Carrington, of whom Smith says, "During my years in the world of politics I have come into contact with my fair share of devious characters, but I regard Carrington as the most two-faced of all."

...

[DurhamBorn]

1 hour ago, SpectrumFX said:

I'm in a spoons right now. It's absolutely rammed full of people.

I may be buying a few shares myself based on what I've seen today.

Iv bought so many there will probably be a stock market announcement about it and Tim will be asking my intentions.

If we can get them to run though im going to fund a day in Durham for you all.Given the mood on here its more likely they will find accounting errors next week and need a huge rights issue diluting shareholders by 99% 

 

 

[Funn3r]

3 hours ago, Lightscribe said:

It will be a difficult pill to take (for many on here too). We’ve been hard wired into the mindset that productive labour brings reward and asset ownership/life progression. That leads people to become more conservative as they age, as they vote for policies to protect themselves/family and their assets earned from productive labour.

Reversal of that mindset is no easy task as it’s not logical. It just doesn’t compute why the western leaders haven’t done what’s necessary in cutting back on the likes of bloated public services and welfare for the survival of their own debt based economy. 

That’s why the consensus on here has now shifted to emerging markets away from the west (our own leaders have failed to make the change’s necessary to avoid systemic collapse) in the hope of investing in real world resources/labour/production will bring returns instead (BRICS going their own way).

Point being however, whilst we live here where we do, all that gain for financial prudence and productive labour, i.e. SIPPs, pensions and ISAs and the forthcoming tax/seizure/redistribution could render it all null and void anyway  (hint physical PMs). 

The necessary terraforming of society is starting to take root as they intended.

https://12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2Fc361e372-769e-45cd-a063-f5c0a7767cf4

"Conservative", or not, is 100% meaningless. 

I am a traditional "lefty" -  I was a union shop steward for 10+ years until I packed it in recently.  Stood up for and defended workers, fought management, and went on pickets. Note this is nothing like a modern "lefty" with woke rainbow etc.

I'm pretty much on board with general dosbods basement mindset, which makes me a conservative far-right extremist.

I would never ever vote for the Conservative party, as they are my enemy. I would never vote for the Labour party for the same reason.

So in my opinion attempting to define and measure "conservativeness" is a lost cause.

[JMD]

5 hours ago, Lightscribe said:

We’re talking about a WEF/CCP socialist/communist/technocratic/neo-feudalist Utopia here that our global leaders are proceeding towards regardless. It’s irrelevant if you, or me thinks it will/won’t work in practice. 

I disagree that it's irrelevant to ponder the true effectiveness of any upcoming CDBC. I think such thinking might actually aid us in opting out of any future planned utopian nightmare, and you yourself do highlight the value of opting out of such future systems.

I accept that there is nefarious CBDC planning going on. And for a long while thought it a fait accompli. However the recent cack-handed politicking and inept leadership infecting all our institutional spheres has caused me to do rethink. Although i believe we will get some form of digital control/currency, i think its implementation will fail within a few short years. I fear the authoritarian government will still be left standing (or maybe not?) but it will be robbed of its shiney new economic toy.

After all the slow progress with robotics and self-driving cars shows that much AI tech has been hyped. And most economic and scientific modelling  - including our infamous virus modelling - when it's applied to the real world, it is shown to be far from reliable or even accurate. 

Some say we already have many examples of government electronic data sharing systems. But my thoughts always go the the biggest state run bureaucracy we have - the NHS - where their own internal program to rid themselves of the fax machine is already 5-years behind schedule!?

The results from the China CBDC experiment will be interesting to see. But I think the deferential culture across Asia may be the more determining factor there, whereas in the West far more people will opt out, go into 'goblin mode'(!), or even attempt to fight back. 

I know that with the right political and social tailwinds in place, great achievements can be accomplished, like for example the US 10-year moon program...     It's just that without such optimistic, cohesive national and community moral effort - I think all we will actually get is an ultimately doomed Track-and-Trace damp squib!!

[Formerly]

58 minutes ago, DurhamBorn said:

he mentioned "the macro situation",but he wast talking macro,it was economics

@DurhamBornSorry if you've explained it before in the previous 50,000 pages of this thread, but can you explain what you mean by macro?

To me macro has two possible definitions. Firstly it can mean something very big, as opposed to micro. In science, mega(rather than macro) x micro = 1, so perhaps this is not what you mean by macro.

The second meaning is a sequence of events, each following the completion of the previous, like a computer macro.

I've just assumed that whenever macro is used in this thread, then it means "the big picture". In the past I've been accused of focusing on the detail to the detriment of being able to see the big picture. In many of these cases "the big picture" was an impossibility due to these inconvenient details (or facts). However, when you say he was talking economics, not macro, I begin to doubt that my (limited) understanding of the macro is me trying to understand completely the wrong thing. To me, macro appears to be a perfectly acceptable word to use when describing the sum of a lot of micro economics.

However, both the meanings of macro I've used could be applicable to the content discussed here. Either trying to predict the consequences of all of the micro economic policies or that inflation will follow disinflation.

I have read @BurntBread's thread on the investing subforum, but perhaps it needs a re-read along with The Intelligent Investor!

 

 

[Long time lurking]

Well it looks like this one can be put to bed soon 

No need to look over there anymore ?

 

[Pip321]

1 hour ago, Long time lurking said:

To be honest i think Net Zero is more about having an excuse in place for the harsh economic times that might lay ahead ,along with Russia did it ,it might even be a way of pushing the west towards renewables due the fact they know we will be fucked if the BRICS succeed ,as in it was our choice rather than being outplayed 

All i know for sure though is ,it`s got fuck all to to with climate change /global /warming/CO2

If it’s any tiny small consolation at all I have been reviewing the funds available to me in my SIPP.

Anything with the words ‘Green’ ‘Net Zero’ ‘Environmental’ ‘Eco’ ‘Sustainable’ etc….got absolutely shagged last year. So the twatty, rich, middle class, virtue signalling hippies also got shagged. Those ESG high scores are a price worth paying….as long it’s with someone else’s money🤦🏻‍♂️

Hopefully economic reality will kick in for serious investors….it will but maybe too late. In the meantime I ensure ESG score is at the bottom of my criteria😉

[JMD]

4 hours ago, Eventually Right said:

 

This one’s a Twitter space on offshore oil drilling co’s, Tidewater in particular. 

Yes I've heard good things about Tidewater from other podcasts etc. Also it's financials are good for the sector, including low and decreasing debt. 

[Long time lurking]

 

[JMD]

Neil Howe's new edition of The Fourth Turning is published here 18th July.

He's been promising the book for 3 years so hope it was worth the wait. At 600 pages its 50% longer than the previous edition. But at nearly £30 hardback I might wait for the paperback.

https://www.amazon.co.uk/Fourth-Turning-Here-Seasons-History/dp/1982173734/ref=sr_1_1?crid=3UO40Q13NIBOP&keywords=Fourth+Turning&qid=1672678283&sprefix=fourth+turning%2Caps%2C189&sr=8-1

[Lightly Toasted]

28 minutes ago, Formerly said:

@DurhamBornSorry if you've explained it before in the previous 50,000 pages of this thread, but can you explain what you mean by macro?

To me macro has two possible definitions. Firstly it can mean something very big, as opposed to micro. In science, mega(rather than macro) x micro = 1, so perhaps this is not what you mean by macro.

The second meaning is a sequence of events, each following the completion of the previous, like a computer macro.

I've just assumed that whenever macro is used in this thread, then it means "the big picture". In the past I've been accused of focusing on the detail to the detriment of being able to see the big picture. In many of these cases "the big picture" was an impossibility due to these inconvenient details (or facts). However, when you say he was talking economics, not macro, I begin to doubt that my (limited) understanding of the macro is me trying to understand completely the wrong thing. To me, macro appears to be a perfectly acceptable word to use when describing the sum of a lot of micro economics.

However, both the meanings of macro I've used could be applicable to the content discussed here. Either trying to predict the consequences of all of the micro economic policies or that inflation will follow disinflation.

I have read @BurntBread's thread on the investing subforum, but perhaps it needs a re-read along with The Intelligent Investor!

 

 

That's a good question that occurred to me as well when reading @DurhamBorn's post.

This is what Investopedia has to say:

Microeconomics vs. Macroeconomics: An Overview
Economics is divided into two categories: microeconomics and macroeconomics. Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.

Though these two branches of economics appear different, they are actually interdependent and complement one another. Many overlapping issues exist between the two fields.

KEY TAKEAWAYS

• Microeconomics studies individuals and business decisions, while macroeconomics analyzes the decisions made by countries and governments.
• Microeconomics focuses on supply and demand, and other forces that determine price levels, making it a bottom-up approach.
• Macroeconomics takes a top-down approach and looks at the economy as a whole, trying to determine its course and nature.
• Investors can use microeconomics in their investment decisions, while macroeconomics is an analytical tool mainly used to craft economic and fiscal policy.

 

...which is pretty much in line with what I've always understood, though it still misses geopolitical and other global issues.

That last bullet point is the killer, though. Whoever wrote it does not think that macroeconomics is useful for investment decisions -- nuts. Fair enough, within the cycle a micro-focussed approach can be a profitable way to look at things, but that's the kind of investor that gets destroyed at turning points.

[Colliedog1]

3 hours ago, SpectrumFX said:

I'm in a spoons right now. It's absolutely rammed full of people.

I may be buying a few shares myself based on what I've seen today.

Went in spoons on boxing day ( we go every year covid permitting). It was quieter compared to previous years. Went in at about 1p.m and there were a few empty tables, usually we have to hang about and wait for a table to be available. I was surprised.

[JMD]

3 hours ago, Long time lurking said:

They have another very important similarity they both have strong a manufacturing base

i`m pretty sure they both used the exact same model to build it as well

The best term i have heard to describe the model is state economic socialism ,( targeted state/central bank investment in the private sector) this is what really scares the western central banking system when it comes to the BRICS ,it`s a proven model that they have no way of controlling outside of there financial system 

From what i can workout what the BRICS are looking to do regarding a reserve currency system is loosely based on Chinas twin banking system

If you have not watched the video below ,there's never been a more pertinent time to do so

 

I understand that America actively wanted Japan to keep it's war-time economic model, that of the government/corporates/banking sectors all working toward agreed long-term economic targets. 

The US had great influence in Japan post WW11 and occupied it until 1952, including ignoring the war crimes of senior Japanese individuals (actually i'm not sure if any Japanese were prosecuted for war crimes?) and who mostly continued in their government/military posts until retirement! Interesting to contrast this with the penalties that German war criminals received. 

[BadAlchemy]

1 hour ago, Long time lurking said:

Well it looks like this one can be put to bed soon 

No need to look over there anymore ?

 

Maybe I'm too old and cynical but it smacks of something we assumed was a right about to be made a permission/privilege?

Then you see sentences like this...

https://www.gov.uk/government/news/new-powers-to-protect-access-to-cash

"In December 2021, the sector announced that it had developed a voluntary industry model that accounts for the different types of facility that provide cash access, including initiatives to provide shared services, to protect access to cash. Under the model, a coordination body assesses the cash needs of local communities and makes recommendations for alternative services to be put in place as appropriate. The government intends to enable HM Treasury to designate cash coordination bodies for FCA oversight. This has been facilitated through the Cash Action Group, which was convened by UK Finance and consists of major retail banks and building societies, consumer groups, Post Office, and LINK."

Then at the CAG/UK Finance site ( https://www.ukfinance.org.uk/our-expertise/personal-banking/access-cash )...includes a commitment to "protecting current critical cash infrastructure until a viable alternative to cash is available"

Then other things brought in by the legislation such as ...

( https://www.allenovery.com/en-gb/global/news-and-insights/publications/financial-services-and-markets-bill--big-bang-2-0-or-more-of-the-same )

"Digital Settlement Assets

The FSM Bill brings activities facilitating the use of certain stablecoins, where used as a means of payment, into the UK regulatory perimeter, primarily by amending the existing electronic money and payment system regulatory frameworks. It introduces a definition of ‘digital settlement assets’ (DSAs), a new concept which has not been previously defined in legislation ‘a digital representation of value or rights, whether or not cryptographically secured, that (a) can be used for the settlement of payment obligations; (b) can be transferred, stored or traded electronically; and (c) uses technology supporting the recording or storage of data (which may include distributed ledger technology)’."

i.e. only government/FCA approved DSA's would be lawful, presumably.

[DurhamBorn]

1 hour ago, Formerly said:

@DurhamBornSorry if you've explained it before in the previous 50,000 pages of this thread, but can you explain what you mean by macro?

To me macro has two possible definitions. Firstly it can mean something very big, as opposed to micro. In science, mega(rather than macro) x micro = 1, so perhaps this is not what you mean by macro.

The second meaning is a sequence of events, each following the completion of the previous, like a computer macro.

I've just assumed that whenever macro is used in this thread, then it means "the big picture". In the past I've been accused of focusing on the detail to the detriment of being able to see the big picture. In many of these cases "the big picture" was an impossibility due to these inconvenient details (or facts). However, when you say he was talking economics, not macro, I begin to doubt that my (limited) understanding of the macro is me trying to understand completely the wrong thing. To me, macro appears to be a perfectly acceptable word to use when describing the sum of a lot of micro economics.

However, both the meanings of macro I've used could be applicable to the content discussed here. Either trying to predict the consequences of all of the micro economic policies or that inflation will follow disinflation.

I have read @BurntBread's thread on the investing subforum, but perhaps it needs a re-read along with The Intelligent Investor!

 

 

Macro is the whole picture,its huge,everything.You need to understand trend in each economy since year dot.Once you have trend you then need to know the amount of money in an economy,then the demands on that money (debt) then the cost of that money (rates).Economics would say if you give Susan £20 more bennies then she will spend that £20 in the economy creating demand.It will turn over four times and we can tax each time at 26%.Giving Susan £20 costs us nothing but grows the economy 4%.Thats the model the BOE etc use,simplified there,but its the model.

Macro sees that production had fallen below trend for 40 years so increasing Susans £20 means taking it off someone else in tax,or in inflation because the inputs to produce more are not there.

My model showed me our productive capacity was falling as they increased bennie spending etc so i knew at some point that trend would have to reverse,or if we got a shock like someone turning the energy off or the imports off a huge amount of pain.

My trend in the UK shows we are producing around 20% less than we need to for the demands we have.Not wants,but demand now.In a disinflation you could keep importing and selling debt.In an inflation you cant.Immigration and bennies are most of the problem,pension promises next.The economy has no chance of repair at the moment.Its trying to heal,but the polos are stopping it.

The macro is very very easy at the moment.The polos are so far away from policies they need there is no way there will be a trend change to the good,its carry on down or speed up down at the moment.Every day they wait is a deeper structural problem.

You have to remember though im a contrarian,so i use added weight going against consensus,i use multipliers that others wouldnt use.Its those i tweak all the time,not the underlying figures.Funny enough it was using a multiplier that signalled bennie and tax increases would encourage more to retire early and leave the workforce.Always learning and will always get some things wrong.

One morbid thing is that im amazed lots of polos have not been murdered yet.They are destroying so many lives and refusing to reverse its only a matter of time i think.In past situations like this the ruling class has been removed and killed.