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

[DurhamBorn]

7 minutes ago, Errol said:

They werent worried,because the policy was to increase inflation by a quick 30% and then 65% over the cycle.However they are worried now because the inflation is front loading too much and they didnt expect the Brics to decide they didnt want fleecing anymore.Western CBs thought they could print and but Russian energy and Chinese workers lives for free.That is the story of this cycle.Page one i said the backbone of the economy couldnt produce enough for the demands on it.That was the huge big thing my macro roadmap showed.Everything else is cross market work with that.

It does cut both ways a bit though,China etc will have to build up their service industry while the west its production.

I think rates will undershoot in the EM world as a whole.I think the key thing now that the market is missing is that EM savings arent going into western debt from here,they will go into their own debt and equity markets.That is hugely bullish,but if on top western capital flows there as well we could see a bubble develop by the end of the cycle.

Demand destruction from the west will hit the east,but they have access to cheaper energy for this cycle,so should counter it with increased demand at home.

Europe and Russia could of been the leading players if they worked together,but European polos have destroyed that.

[marceau]

41 minutes ago, reformed nice guy said:

The "new Americans" are not the same as the old ones. Its a different people so to compare based on history you have to somehow take into account Mexico and other south American countries.....

https://nces.ed.gov/programs/coe/indicator/cge

This x 1000. Pretending that the current US (or UK for that matter) is the same one that went to the moon is just laughable. America got great results because of its people. Replace the people and you get different results.

'Magic dirt' theory, as the alt-right used to say. The notion that different races somehow become magically the same just by landing on American soil.

[Axeman123]

5 minutes ago, DurhamBorn said:

Europe and Russia could of been the leading players if they worked together...

I think the yanks saw that writing on the wall, and the Ukraine situation was intended to force a permanent fracture to prevent it as a backup plan if it didn't outright balkanise the Russian Federation for "reconstruction" and looting. The irony being that the EU is now being painted into a corner by US actions to where it will have to go "Turkish", and play ambiguous alignment games to survive. In that scenario I expect the US to go scorched earth on the EU, and try to leave only economic ashes for Russia to inherit.

Pure US incompetence and hubris. 

[reformed nice guy]

15 minutes ago, marceau said:

This x 1000. Pretending that the current US (or UK for that matter) is the same one that went to the moon is just laughable. America got great results because of its people. Replace the people and you get different results.

'Magic dirt' theory, as the alt-right used to say. The notion that different races somehow become magically the same just by landing on American soil.

Completely agree .

Some of the cuckold civic nationalist types say "but its the culture and institutions that are most important"

They are destroying those too!

[M S E Refugee]

Blame West for global inflation spike, says ex-president of EU country https://www.rt.com/news/561640-inflation-energy-ukraine-klaus/

[feed]

1 hour ago, Yadda yadda yadda said:

Yes, the sanctions won't defeat Russia but who says that is their aim? Western Europe is now more subservient to the US than before.

Reminds me of the old poker saying.  If you don't know who the sucker is.. 

And then i look at who is gaining from the conflict and who isn't.  

[CannonFodder]

The country the USA really needs to shaft now is the UK.

The Financial system of London and the offshore wealth that bolsters sterling could support the dollar as fossil fuels fall away.

The UK is already buying expensive fuel from US weakening sterling and talking about seizing russian assets undermining its attractiveness for an off shore wealth destination.

[feed]

13 minutes ago, CannonFodder said:

The country the USA really needs to shaft now is the UK.

The Financial system of London and the offshore wealth that bolsters sterling could support the dollar as fossil fuels fall away.

The UK is already buying expensive fuel from US weakening sterling and talking about seizing russian assets undermining its attractiveness for an off shore wealth destination.

The problem with really weakening the UK, it would send it into the arms of the EU.  And a combined EU and UK is stronger than an argumentative UK / EU relationship.  The US needs the UK to be strong enough to be a nuisance to the EU whilst still being completely dependant on the US.  

Just imagine if we had a grown up UK/EU relationship, with a strong DE/RUS trade relationship and a stable emerging market/ growing middle class Turkey on the borders.  

Instead of destabilised borders in Libya, Syria and Ukraine.   

[MightyTharg]

3 hours ago, Errol said:

Government will need to give money to everyone or nobody. You can't have a situation where the feckless and those on benefits receive massive amounts of money to help and those who are actually working are forced to pay full whack.

The Government can only give money by taking it from someone else, so trying to give it to everyone is pointless.

If you give everyone a thousand pounds, it make the buy-to-letters and public sector richer and almost everybody else poorer (which is why they are so keen to do it).

[M S E Refugee]

18 minutes ago, feed said:

The problem with really weakening the UK, it would send it into the arms of the EU.  And a combined EU and UK is stronger than an argumentative UK / EU relationship.  The US needs the UK to be strong enough to be a nuisance to the EU whilst still being completely dependant on the US.  

Just imagine if we had a grown up UK/EU relationship, with a strong DE/RUS trade relationship and a stable emerging market/ growing middle class Turkey on the borders.  

Instead of destabilised borders in Libya, Syria and Ukraine.   

I think everything hinges on the Orange Man getting re-elected as I don't think he hates the UK/EU like the Biden administration does.

Also some of the ex-Warsaw Pact Countries could slowly move back under Russian influence so they can keep the lights on.

Many of those Countries will be envious of the Russian Gas that Hungary will be using this Winter.

[feed]

16 minutes ago, M S E Refugee said:

I think everything hinges on the Orange Man getting re-elected as I don't think he hates the UK/EU like the Biden administration does.

Also some of the ex-Warsaw Pact Countries could slowly move back under Russian influence so they can keep the lights on.

Many of those Countries will be envious of the Russian Gas that Hungary will be using this Winter.

2 years is too long.  Midterms may decide immediate policy, but i don't see how there isn't a pull back soon.  

When Germans start freezing to death in 3 ~ 4 months, that's a risk the EU actually collapses.  I don't think anyone wants that, contagion could take out the US and China as well. 

[M S E Refugee]

1 minute ago, feed said:

2 years is too long.  Midterms may decide immediate policy, but i don't see how there isn't a pull back soon.  

When Germans start freezing to death in 3 ~ 4 months, that's a risk the EU actually collapses.  I don't think anyone wants that, contagion could take out the US and China as well. 

I can't see how it doesn't collapse, the German Green Party are unhinged and will not pass up this opportunity to implement their agenda.

[feed]

10 minutes ago, M S E Refugee said:

I can't see how it doesn't collapse, the German Green Party are unhinged and will not pass up this opportunity to implement their agenda.

As someone on here said the Greens are swimming with the tide.  It's hot and dry,  The Rhine at it's lowest is however many years.   Politics will change real quick with people shivering in the dark. 

[wherebee]

40 minutes ago, feed said:

2 years is too long.  Midterms may decide immediate policy, but i don't see how there isn't a pull back soon.  

When Germans start freezing to death in 3 ~ 4 months, that's a risk the EU actually collapses.  I don't think anyone wants that, contagion could take out the US and China as well. 

I want that.

I want examples of the insanity of the EU and green policies so horrific that nobody ever admits to voting green ever again.  I want 'climate change' to become the same sort of un utterable sentence as 'lebensraum'.  I want Greta to be scared to walk the streets because so many people blame her for what happened.

 

The past two years have shown me most humans are really fucking stupid, and need a huge red firey sign to show them what reality is.

[Lightscribe]

28 minutes ago, feed said:

As someone on here said the Greens are swimming with the tide.  It's hot and dry,  The Rhine at it's lowest is however many years.   Politics will change real quick with people shivering in the dark. 

Amazing how you can convince Turkeys to vote for xmas with a hot, dry spell and a good old bit MSM climate change panic narrative.

Not that controlling the weather to suit any agendas is possible of course…

https://amp.cnn.com/cnn/2020/12/03/asia/china-weather-modification-cloud-seeding-intl-hnk/index.html

https://www.independent.co.uk/climate-change/news/dubai-fake-rain-heat-b1887596.html?amp

[Errol]

1 hour ago, M S E Refugee said:

Many of those Countries will be envious of the Russian Gas that Hungary will be using this Winter.

Russia also just starting construction of two new nuclear reactors in Hungary as well.

[Don Coglione]

1 hour ago, M S E Refugee said:

I think everything hinges on the Orange Man getting re-elected as I don't think he hates the UK/EU like the Biden administration does.

Also some of the ex-Warsaw Pact Countries could slowly move back under Russian influence so they can keep the lights on.

Many of those Countries will be envious of the Russian Gas that Hungary will be using this Winter.

https://www.bbc.co.uk/news/world-europe-62695938

[JMD]

5 hours ago, Yadda yadda yadda said:

How is the Government going to afford all the costs that are about to hit?

1. Energy subsidy for consumers.

2. Massively increased unemployment as people stop spending and business costs spiral.

3. Increased debt servicing costs from higher interest rates.

4. Higher costs to run services as buildings cost more to heat, vehicles more to run and employees more to keep off the picket line.

5. Reduced income as economic activity collapses.

The public finances will burn. Tough choices will have to be made.

Good questions...  How about 'Half-Trillion-Truss' (that's what they'll soon be calling her!) to get her government to write a 4% 20year iou to itself (Japan style). She's been coy about her future borrowing plans so far but expect a big and grand statement soon. Why not - it's last chance saloon time in any case, and increased debt is surely permissable if mostly commited toward productive enterprise(?!). Plus i guess the US wants to maintain its ever so loyal 'aircraft carrier' - USS UKAY - stationed strategically off the coast of the unruly EU!

[CannonFodder]

Meanwhile

[Axeman123]

22 minutes ago, JMD said:

How about 'Half-Trillion-Truss' (that's what they'll soon be calling her!) to get her government to write a 4% 20year iou to itself (Japan style)...

If that was exclusively for nuclear power, encouraging oil/gas exploration/drilling etc you could almost call it a good idea. It would be a "shit or bust" gamble, but desperate times etc. Luke Gromen has suggested something similar for the US.

The sad truth is even with Truss you would get the bulk squandered on more of the failed policies of the last decade.

[DurhamBorn]

37 minutes ago, CannonFodder said:

Meanwhile

I thought that was the Eurovision scoreboard.

[DurhamBorn]

18 minutes ago, Axeman123 said:

If that was exclusively for nuclear power, encouraging oil/gas exploration/drilling etc you could almost call it a good idea. It would be a "shit or bust" gamble, but desperate times etc. Luke Gromen has suggested something similar for the US.

The sad truth is even with Truss you would get the bulk squandered on more of the failed policies of the last decade.

Irony is it wouldnt be a gamble at all,it would be a very very sound investment.They are chucking £200 billion plus down the bennies black hole a year,consumption,no production.The way to get on top of this cycle is to make sure the inflation is used to build.We stand on the edge of collapse,but there is still a small window and if taken we can make it through.Macro says systemic collapse certain because of consumption by parasites on the productive.You could stave off collapse if you can swing things back to production.

I expect them to do it,and also in a way where they can free up insurance company balance sheets.Government taking a stake,but being the first to lose it would ensure trillions of capital.The game isnt over,but they need hard headed realists in charge and to force through whatever they need.If i swing the bennies and public sector pensions to investment in the backbone of the economy we go from systemic collapse to one of the best economies on the planet.Its all to play for still.

Its critical we understand how these things affect the outcome,because it will decide how much capital to have facing sterling,or how much as now out of sterling.

[M S E Refugee]

15 hours ago, Bus Stop Boxer said:

This is great.

 

I have just subscribed to Bubba's YouTube channel . 

He reminds me of this guy.

[Axeman123]

9 minutes ago, DurhamBorn said:

Irony is it wouldnt be a gamble at all,it would be a very very sound investment.They are chucking £200 billion plus down the bennies black hole a year,consumption,no production.

The bolded part really puts the numbers into perspective. A trillion still sounds like a lot of money, but you know a few hundred billion here and there really add up!

[Joncrete Cungle]

1 minute ago, Axeman123 said:

The bolded part really puts the numbers into perspective. A trillion still sounds like a lot of money, but you know a few hundred billion here and there really add up!

Especially when it's freshly printed up and interest bearing / any losses by the BoE need to be made good by the treasury / taxpayer....