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

[DurhamBorn]

1 hour ago, Lightly Toasted said:

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.

I think the key like you say is cycle turns.If we take the fact we spotted it and our returns for myself, iv increased family wealth by 53% since March 20.The Vanguard 60/40 is up 2% (down 1% with fees).Thats a 20 year earlier retirement for four family members.I actually think i made too many mistakes as well.Im not fully happy with that return,it should of been higher,i made some allocation mistakes and i sold too soon for no other reason than i was up a lot in some areas.Luckily my dad in his investments told me to mostly buy "when they go down another 10%,your always a bit early" worst thing is he was right 

[Eventually Right]

16 minutes ago, DurhamBorn said:

 

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.

 

Give it time DB.  You can see the macro, and where things are headed and how bad things might get.

For most people though, things haven’t got bad enough yet for them to do more than moan, whilst worrying about their house being worth less or paying the bills. They assume it’s a temporary blip.

I’m sure the politics will get more extreme, and the population much more angry, but living standards haven’t decreased enough yet.

If I had to guess, I’d assume it’s a non-linear correlation between living standards and political violence-if the equivalent of a Weimar Republic drop in living standards happened, we might well get a similar level of political murders they had 🤷‍♂️

 

[King Penda]

1 hour ago, JMD said:

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. 

China killed a few

[Noallegiance]

Anecdote to add to my recent News UK HR employee nightmare:

Just come home from a family friend. They love to talk about their global trips and experiences but in an informative way. As I've always said, I'll never begrudge wealthy people. They're actually very successful at what they do. But on hearing these lavish things my mind is always whirring in the background wondering how they've paid for it.

They have a lovely maxed out remortgaged house and a beautiful newish car.

They run a business.

Turns out they don't save to pay their tax so they're going to have to take out a loan to pay their tax bill. And they take a ton out of the business as well as their house for their life of finery.

I have a feeling what I'm convinced is happening soon will shape attitudes in the way the 1930s shaped attitudes.

[ThoughtCriminal]

Nice chart from Gromen. And a nice little bit of sarcasm.

[Long time lurking]

1 hour ago, JMD said:

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

i don`t think that was entirely the USA`s plan ,but it was the Japanese plan ,their central bank went to great lengths to keep what it was doing quiet they had quite different ideas of the targets they were supposed to meet,then deregulation of the banking industry in the 1980`s put paid to Japan and the west as a whole,which was all driven by the USA`s corporate greed   

But you are right about the leaders during the war and after it ,this is why they become the USA`s bitch 

[Virgil Caine]

4 hours ago, DurhamBorn said:

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.

 

The post war Labour government of Clement Attlee was unpopular because it retained rationing and prioritised exports over domestic consumption  but in retrospect they probably did the correct thing. I doubt Starmer would have the courage to implement anything so bold if he gets into power

[Long time lurking]

1 hour ago, BadAlchemy said:

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.

That is more about all the banks closing branches,they are legislating to ensure they have adequate cash machines available

Cash will never disappear ,the black economy is to big ,if they don`t use cash they will use something else and crypto is the favourite for that, that`s the last thing the government and police would want , as the second half of your post proves 

Cryptos are going to be regulated to death IMO

 

[CannonFodder]

As someone who read too many books instead of chasing girls, historically French revolution where powers that be get whacked are not that often.

Typically the rulers scapegoat a group be it jews in germany or the kulak middle classes in USSR.

Who will they try this time.

Perhaps the early retired, off to a carbon neutral gulag where guards are both sadistic and diversity trained.

[sancho panza]

11 hours ago, Pip321 said:

I note you say you are heavily invested in equities….but I imagine they are very selective (rather than all lumped in a global equity tracker), so maybe not a bullish ‘overall’ as some may read that😉.

I carry our investmetns at booked cost,keep my portfolio noted on about 4 sheets of A4 and don't really watch movements on a daily/weekly/monthly so as to avoid the urge to sell.There'll be some variance due to currency effects etc but we're about 42% oil,28%% PM miners,10% or so telecoms(been buying dodgy Euro ones this last week),10% baccy and a couple of stray % uranium and 2% in PM miner calls

There's a lot of equity in the oil positions and the PM miners have seen some big sales in Aug/sept 20 and again March April 22 so been able to rebuy lower.

We are very narrowly invested but invested we are.

8 hours ago, ThoughtCriminal said:

Thoughts?

I don't see a way that the Fed doesn't double down on their playbook,I know it's the thread thesis but that thesis is ....ahem....based on the Fed playbook.

You don't get this deep in the hole by changing policy direction when the evidence tells you it's going worng.You get this deep in the hole by doing something stupid,then when that doesn't work,you try a second/thrid time jsut in case.

8 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

The reason millenials aren't becoming conservative is becasue they're the poorest generation since the second world war.

Sh1tty two bed terraace in Liecester is circa £160k min,local average £20k.They have no fincial stake in the UK like the generations before

There's fully qualified paras at work either living at home or in HMO's,can't afford to rent or buy as well as pay their student debt/utilities.

[Clueless Imbecile]

I've been reviewing my investment pot recently (mostly in ISA, but some cash, premium bonds, PMs in a vault). Note: "equities" means "shares". All figures are approximate.

The following is for equity index tracker funds I've held for a few years (can't remember now, but probably around 7 years). It's interesting to see that the UK has been a relatively poor performer, and Japan was not much better. Note: this is accumulation units, and it includes dividends re-invested and the effect of charges:

US 94%
Europe 56%
UK 35%
Japan 38%
Pacific (excluding Japan) 61%
Emerging markets 43%
Global small cap 66% (last I looked, around 50 to 60% of this fund was US small cap equities)

Here is my current asset allocation:

Total equities 71%
Equity index tracker funds 34%
Individual equities 37%
Cash (inc premium bonds & NS&I savings bonds) 21%
Gold (in a vault) 3%
Silver (in a vault) 4%

Individual equities allocation:

Oil & Gas 20%
Telecoms 6%
Tobacco 4%
Potash 3%
PM Miners 6%
Asset managers 2%

I had some utilities (SSE) but sold.
I had some transports (Go Ahead, Stagecoach) but they were sold or got taken over.

Rough estimate of my investment pots return over the past 12 months: +8%
Considering that the S&P500 seems to have returned approx -19% I feel like I've been quite lucky.

General thoughts:

I want more telecoms and asset managers shares.

Questions:

1) What percentage should I have in cash?
I'm 50. At that age my high equities & low cash allocation goes against the traditional idea of "Own your age in cash & bonds, and put the rest in equities". However, for the past few years I've believed that bonds were over valued (yield too low) and that cash is being rapidly debased/devalued by inflation, hence my low cash allocation. The main reason I might want to hold more cash is if I thought a big stockmarket crash was imminent, or if I wanted to buy a house in the next few years (I don't currently plan to but that might or might not change).

2) Should I buy more potash or is it too late now?

3) What other sectors (if any) should I consider?
I know @DurhamBorn mentioned Wetherspoons, but last I looked they haven't paid any dividends for a while, and I think of them as being like bricks & mortar retail, which is a sector I prefer to avoid at the moment. I feel quite reluctant to buy shares that don't pay a dividend (at least 2% but ideally more like 6%), with the possible exception of stocks that I think might rise a lot (e.g. PM miners).

Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

[BadAlchemy]

46 minutes ago, Noallegiance said:

I have a feeling what I'm convinced is happening soon will shape attitudes in the way the 1930s shaped attitudes.

The tide is going out and we are seeing who is swimming naked. Changing attitudes in the face of new facts and realities is very hard for some. The anger and resentment will be great, even/especially from friends and family... so we must be very careful.

Family member of mine has a little dig at me. Says I live a 'life of Riley' because I chose to save,be prudent, and semi-retire early. I now apparently have 'more money than sense' because I keep radiators on in my house rather than constantly turn them on and off.

Thing is, I can pay the extra energy costs using dividends from energy companies that I invested in. It's a radical idea, I know... investing in or enabling investment in energy/commodities that humans need to live, and then receiving a share of the rewards... maybe the UK government could try it some day?

I tried to explain to this person 3 years ago that inflation was headed our way. Suggested gold, silver etc... doubt they've done anything to protect themselves.

[Funn3r]

2 hours ago, DurhamBorn said:

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

Genuine question, what has changed? I remember this thread back on TOS when you used to say that you completely disregarded politics as it was just irrelevant "noise" which distracted from the real business of the macro roadmap.

[sancho panza]

7 hours ago, DurhamBorn said:

Correct.Likely they will buy up bonds thinking inflation has peaked (and growth stocks) only to be hit again as inflation increases again.Irony is EMs might not suffer much more inflation.The ones that are net producers should also see a rising currency to help.I still think 65% inflation for the cycle,how it gets there who knows,but get there it will.

BAT are usually on the ball,so i would expect they might not do much share buybacks next year but pay off debt instead.Debt deflation with price inflation.The wests savings moved to the Brics.

I think thats a key theme in bold that you've been psuhing for sometime and I think it's an astute take on how to proetect your buying power.

Nice to see the thread thesis from years back getting aired.Debt/Credit deflation inbound going to be made worse by price inflation.So many academic economsits view inflation deflation debate through the prism of price when they should be consdiering credit system as well as price system.If credit is expanding as prices rise,then we can aovid recession,if it's not then the recession will be worse for it.

 

In terms of predictions,ref that previous psot on S&P 500 gains by calendar year.

All the portents are saying either 25%+ up or 25% +down for the S&P.Persoanlly I think we''ll face the credit market Big Kahuna later this year and we'll be going down 25%++ but we'll be staying ong for now until I can see a viable bailing point.

 

Worst case scenario

BRICs++ gets act together and shafts dollar with yuan/ruble commodity trading,Fed cutting/QEing to ease unemplyoemtn due to rising price inflation.weak dollar phase

credit deflation as commerical and resi real estate hit the buffers int eh US and West and take a few big banks down,and junk bond markets implode

Oil hits $150 on a sustained basis,copper goes over $4 a pound,coal stays above $400,cost push price inflation reinforces cost of living crisis in the West

Eurozone/other Wetsern CB's hit the buffers, can't print to because Fed is printing and pushing commodties up  and need to fight cost push.Said countries debt problems become central issue as bond markets sell off further reinforcing debt deflationary spiral.Fishers paradox kicks in and people/countries in West start paying down debts further worsening debt deflationary spiral

If the above happens,25% comes off the S&P with a few easy puffs.

 

Best case scenario

Inflation eases across Western world,peace in Ukraine and disorgnaisation on part of BRICS++ means dollar reigns supreme-Fed able to QE/cut to ease unemployment situation.

Commodity prices stay flat at worst,at best ease down.

Due to lowering inflation ECB can print some to help out Eurozone periperhy and thus no debt crisis occurs because there isn't a debt problem in EU.

Zombie companies able to keep borrwoing from willing & solvent lenders.

CRE and resi real estate markets become liquid again and price drops bottom meaning banks stay solvent in the main.

Big Tech recovers it's halo and punters pile back in.

If that ahppens we could see 20% on the S&P

 

If I had to put moeny on it,I think we'll be down heavily by year end but as I said to @Pip321 we're still very long here.

 

 

[King Penda]

1 hour ago, Long time lurking said:

That is more about all the banks closing branches,they are legislating to ensure they have adequate cash machines available

Cash will never disappear ,the black economy is to big ,if they don`t use cash they will use something else and crypto is the favourite for that, that`s the last thing the government and police would want , as the second half of your post proves 

Cryptos are going to be regulated to death IMO

 

Something like if you’ve nothing to hide you have nothing to fear type lingo

[sancho panza]

6 hours ago, DurhamBorn said:

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.

 

Absolutely.If you invest in the things that are going to drive cost push over the next decade you'll maiantian your spending pwoer.If you don't you'll get rinsed buying retialers and commerical real estate.

Such a simple sentence in many ways but throwing off a very thorough and complex answer to the probelms we face.

1 hour ago, Noallegiance said:

I have a feeling what I'm convinced is happening soon will shape attitudes in the way the 1930s shaped attitudes.

Agreed.I think it's no coincidence that as the last of the generation that voted in Glass Steagall left Congress in the 90's,teh West embarked on the road to bankruptcy(moral and financial) with it's repeal and the banking leverage race that followed.

When I hear people tlaking about detb like it's a dose of syphllis then we'll know we're near a bottom.My only concern for the UK is that by that moment,it may not be a place your average basement dweller would want to live as the security sittuation will be more risky.

[DurhamBorn]

1 hour ago, BadAlchemy said:

The tide is going out and we are seeing who is swimming naked. Changing attitudes in the face of new facts and realities is very hard for some. The anger and resentment will be great, even/especially from friends and family... so we must be very careful.

Family member of mine has a little dig at me. Says I live a 'life of Riley' because I chose to save,be prudent, and semi-retire early. I now apparently have 'more money than sense' because I keep radiators on in my house rather than constantly turn them on and off.

Thing is, I can pay the extra energy costs using dividends from energy companies that I invested in. It's a radical idea, I know... investing in or enabling investment in energy/commodities that humans need to live, and then receiving a share of the rewards... maybe the UK government could try it some day?

I tried to explain to this person 3 years ago that inflation was headed our way. Suggested gold, silver etc... doubt they've done anything to protect themselves.

I dare not tell anyone i know my gas and electric bill is £36 a month after the governments bung  with long fixes .

[DurhamBorn]

55 minutes ago, Funn3r said:

Genuine question, what has changed? I remember this thread back on TOS when you used to say that you completely disregarded politics as it was just irrelevant "noise" which distracted from the real business of the macro roadmap.

The politics should follow the macro so shoud not matter,but this lot of polos seem to be simply ignoring every sign and just carrying on driving us over a cliff.In simple terms i guess we simply have the worst polos in this countries history.Both main parties seem to of lost their minds.Its likely its just more of a lag than usual,but if not then we are facing disaster.

[Loki]

 

[sancho panza]

 

@WICAO@wherebee@Sugarlips for comment if any

debt deflation cometh series.

doesn't take much of a rate hike to pop bubbles this big.

30% of Ozzie borrowers face 40% mrotgage hikes....amazing stat.I guess this is what happens when you don't have a recession for 30 years,every man and his dog moves in on the ponzi

Interesting as well that Sky reporting Oz struggling to find migrant workers,so inflation not goijng away

https://news.sky.com/story/australia-reviews-visa-system-as-it-grapples-with-worker-shortage-after-strict-covid-rules-12777750

Australia reviews visa system as it grapples with worker shortage after strict COVID rules

The country closed its borders during COVID and told foreign students and backpackers to go home. It is now facing the West's second-worst employee shortage after Canada, with some companies offering signing bonuses and flying them in from overseas.

https://uk.finance.yahoo.com/news/australia-house-prices-tumble-most-130100600.html

Australia House Prices Tumble Most Since 2008

(Bloomberg) -- Australia’s housing market suffered its biggest annual decline since 2008 last year as sharp interest rate hikes sapped buying power and put off investors.

The national Home Value Index fell 5.3% in 2022, the first decline since 2018, CoreLogic Inc. said in a report Tuesday. Annual falls were the biggest in the bellwether market of Sydney, which slid 12.1%, followed by an 8.1% drop in Melbourne. National values declined 1.1% in December, according to the report.

The Reserve Bank has raised interest rates by 3 percentage points since May to 3.1% and is widely expected to hike one or two more times this year. RBA officials have generally expressed confidence in Australia’s housing market, highlighting that prices are still higher than at the onset of the pandemic. In addition, with unemployment at the lowest level in almost 50 years, borrowers are well placed to meet their commitments and loan arrears are likely to be limited.

Australia’s A$9.4 trillion ($6.4 trillion) housing market has declined 8% from the recent peak reached in April, after surging 28.6% from a pandemic-induced trough, CoreLogic said.

An RBA document last month showed some 30% of Australian borrowers on fixed-rate mortgages will see repayments climb by more than 40% when their loans roll over in 2023.

“As interest rates peak and inflation eases, housing values are likely to stabilize, however a broad based rise in housing values would be dependent on interest rates coming down, or on other forms of stimulus,” CoreLogic said in the report.

[AyrshireBoy]

33% dividend on MVG to win the darts tomorrow night......

[Yadda yadda yadda]

4 hours ago, BadAlchemy said:

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.

I read the article, noted that the writing credit was assigned to an MP and then decided I wasn't sure whether to trust an MP less than a journalist.

Therefore I had a look at the legislation as currently written. Seems that schedule 8 from page 158 is the relevant part. To me it looks completely toothless. Nothing to stop a future Government deciding cash is no longer necessary.

https://bills.parliament.uk/publications/49063/documents/2625 (pdf link 2.5mb)

[Bobthebuilder]

1 hour ago, DurhamBorn said:

I dare not tell anyone i know my gas and electric bill is £36 a month after the governments bung  with long fixes .

I would love to know how that's possible. I am a bloody gas man ,and cannot get mine anywhere near that (even with theft), more like £300 a month.

You are either , taking the piss, or have something dodgy going on.

[PETR4]

8 hours ago, DurhamBorn said:

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.

 

I hope Emily can save us!

Economist, Macro-Financial Risks at Bank of England

https://uk.linkedin.com/in/emily-clayton-23470488

One of the Bank's few macro people. Sadly everyone at the top is Keynesian ☹️

[CannonFodder]

Bit OT

French finance minister Bruno Le Maire discussed how sanctions wrecked Russian's war machine tonight while journalist Reported live from ukraine.