Credit deflation and the reflation cycle to come (part 5)

[Long time lurking]

10 minutes ago, Alifelessbinary said:

f the new new BRICS banking system won’t accept dollars then no western/NATO country will have access, so we’ll be locked out of the opportunity anyway.

No mate you need to think a little deeper ,they will simply have to convert $ into something they will except commerce will always trump politics just look at the success of the 1000+ Russian sanctions for all the proof ever needed

[Long time lurking]

3 minutes ago, Noallegiance said:

This is the kind of diversity I can get behind

Don`t make a mess though 

[marceau]

1 minute ago, Long time lurking said:

That has been solely dependant on how the US/UK etc have controlled the likes of Brazil ,for sure others want a bite of that cherry but it`s the fact that, that cherry is being denied to the west over the likes of China etc 

Put simply the west is losing it`s grip on their hegemony over the rest of the world ,to understand how that MIGHT positively effect the Brazils of the world etc you have to first work out how China broke the west control model, which allowed it`s rapid growth,to me it looks very much like they are exporting that model via the BRICS alternative financial system ,this is what the western central banking cartel really fear  

Foe now we can only guess ,time will tell though 

Sure, but as of today China hasn't broken anything. The west did it to themselves.

Deng sees the offers, says 'thanks very much' and makes out like a bandit. They then watch the shitshow of the USSR collapse aftermath and correctly conclude that perestroika works but glasnost is a disaster. 3 decades of watching their enemies fuck up later they're in a great position; but the only piece of initiative was internal, the west, stupidly, did all the rest for them.

That model's now over, so as you say time will tell, but I think people are getting way ahead of themselves regarding transition from western hedgemony. It's weakening, but it's far from dying. Western nation states could all collapse tomorrow and the hedgemony would not only still be there, it could be stronger, having dropped the considerable burden of its ideological and economic lunacy.

Mao's mass starvation to Deng's prosperity in a single generation. Human radicalism means the same is easily possible for the west.

[Alifelessbinary]

1 minute ago, Long time lurking said:

That is delusional tosh from Mr Zeeland's book 

What it has is the ability to make what it wants for sure ,enjoy your £6 k iPhone and £1 Nike trainers ,if you can`t work out what that means stay away from the bookies is my advice

You will soon hear the USA screaming about rare earth metals ,they are about to get a revers petrol dollar treatment 

That opinion come from more than a single book. It mainly comes from operating in international capital markets and delivering large scale development projects.

When you buys some shares and have some skin in the game you can comment on whether I should go into the ‘bookie’. I’m challenging these thought as people might use them to change their investment strategy and shift from the West. If you can show me how I can invest in the change I’d be a lot more interested.

Im not saying your BRICS analysis isn’t welcome I just don’t feel it in the short term it will impact my investment strategy. This thread works so well as people share and disseminate a vast variety of thoughts.

[Long time lurking]

16 minutes ago, Alifelessbinary said:

Other than not being American I really don’t see Russia and China as being the great hope for those choosing to enter their orbit. Good to many African countries and the anti Chinese sentiment is high, yet many still remember colonial rule quite positively (Stockholm Syndrome).

Is that why France is having it`s arse handed to them on a plate all over Africa ? yet Russia and China are welcomed with open arms 

Like a Bulgarian mate of mine that worked in SA since the wall came down said to me  ",the Chinese's are like they are invisible ,they can walk down a street without a care in the world where i would be mugged within 100yards if i done the same, they can open up shops where the whites fear to tread i just don`t understand why " 

 

[Long time lurking]

6 minutes ago, Alifelessbinary said:

That opinion come from more than a single book. It mainly comes from operating in international capital markets and delivering large scale development projects.

When you buys some shares and have some skin in the game you can comment on whether I should go into the ‘bookie’. I’m challenging these thought as people might use them to change their investment strategy and shift from the West. If you can show me how I can invest in the change I’d be a lot more interested.

Im not saying your BRICS analysis isn’t welcome I just don’t feel it in the short term it will impact my investment strategy. This thread works so well as people share and disseminate a vast variety of thoughts.

I have given no financial advice whatsoever and i never will i`m just pointing out whats happening in the geopolitical sphere and i have never said this that or the other will happen ,i have said it might at best 

It`s you that's giving financial advice and asking others (me) for it ,the irony of that is obviously lost on you 

[Long time lurking]

15 minutes ago, marceau said:

Sure, but as of today China hasn't broken anything

Yes they have they broke the central banking model bestowed on the rest of the world by the west

That`s the secret to their success , government socialist target funding ,then let capitalism do the rest ,and that's proper capitalism where the weak are allowed to fail,this is when everyone starts screaming look i told you so they are fucked ,the real secret though is the central bank is there to service the country not the bankers 

Japan used the same system 1945-1980`ish then the FED stepped in imposing their model,the rest is history 

[Long time lurking]

26 minutes ago, marceau said:

Deng sees the offers, says 'thanks very much' and makes out like a bandit. They then watch the shitshow of the USSR collapse aftermath and correctly conclude that perestroika works but glasnost is a disaster. 3 decades of watching their enemies fuck up later they're in a great position; but the only piece of initiative was internal, the west, stupidly, did all the rest for them.

Without a doubt they played the long game and chose their moment very carefully they realy had no other choice  ,after all they are going against a system that has been developed over almost half a millennia,they also as you rightly point out started from a a very low base AKA as bankrupt  

[marceau]

12 minutes ago, Long time lurking said:

Yes they have they broke the central banking model bestowed on the rest of the world by the west

 

They really haven't, that model is still going strong. Imo it's about to enable the largest credit expansion in human history (to the almost exclusive benefit of the US, ROW gets scraps).

12 minutes ago, Long time lurking said:

That`s the secret to their success , government socialist target funding ,then let capitalism do the rest ,and that's proper capitalism where the weak are allowed to fail,this is when everyone starts screaming look i told you so they are fucked ,the real secret though is the central bank is there to service the country not the bankers 

Japan used the same system 1945-1980`ish then the FED stepped in imposing their model,the rest is history 

Sure. Whether that remains the case when the Fed isn't providing their economic framework is another matter.

Edited March 12, 2023 by marceau

[Wight Flight]

48 minutes ago, MrXxxx said:

But how does this resolve the issue I covered previously?

 

You can still save towards your retirement, you just don't get the big tax breaks, which you probably don't need anyway if you have already considered retiring once.

the doctors situation is quite unique.

[Axeman123]

1 hour ago, marceau said:

There is the quality of the driver and the quality of the car.

Have you ever read "guns, germs, and steel"? That author makes a very good case for why the west got such a headstart on other continents. There is no inherrent superiority IMO, just the fading advantage of a headstart on industrialisation.

[Long time lurking]

1 minute ago, marceau said:

They really haven't, that model is still going strong. Imo it's about to enable the largest credit expansion in human history (to the almost exclusive benefit of the US, ROW gets scraps).

You have got the wrong end of the stick on that one ,what i meant is they broke free from the model you are talking about not actually broke that model 

My money is on the credit expansion you are highlighting/predicting will be more the Us`s downfall rather than it`s benefit ,the amount of $ in the US is tiny in comparison to whats outside of it ,if the BRICS system gains traction those dollars are all heading in one direction ,i`m sure you know what that means for the USA which have already expanded its monetary supply by 40% in the last 3 years 

[marceau]

3 minutes ago, Axeman123 said:

Have you ever read "guns, germs, and steel"? That author makes a very good case for why the west got such a headstart on other continents. There is no inherrent superiority IMO, just the fading advantage of a headstart on industrialisation.

It's equalitarian prog horseshit. Exactly the line of thinking that landing us in this mess in the first place.

[Long time lurking]

1 minute ago, Axeman123 said:

Have you ever read "guns, germs, and steel"? That author makes a very good case for why the west got such a headstart on other continents. There is no inherrent superiority IMO, just the fading advantage of a headstart on industrialisation.

100% 

And that`s why China have achieved the same in 30 years as what took the west 200+  along with, there was no innovation needed to get to that point as the west had already done it 

I have said many times i don't think it`s ever going to be one system triumphing over the other scenario more a leveling up 

[marceau]

7 minutes ago, Long time lurking said:

My money is on the credit expansion you are highlighting/predicting will be more the Us`s downfall rather than it`s benefit ,the amount of $ in the US is tiny in comparison to whats outside of it ,if the BRICS system gains traction those dollars are all heading in one direction ,i`m sure you know what that means for the USA which have already expanded its monetary supply by 40% in the last 3 years 

I think you're on the money there. Total change in the profile of America as a consequence. 

[Axeman123]

42 minutes ago, Long time lurking said:

Is that why France is having it`s arse handed to them on a plate all over Africa ? yet Russia and China are welcomed with open arms 

France is in decline and looking to extract, whereas China is on the up and playing father Christmas with investment. France has a history on the continent of old school collonialism (The British Empire was better than most of its time) whereas Russia has a history of Soviet era donations.

[Long time lurking]

21 minutes ago, marceau said:

 

Sure. Whether that remains the case when the Fed isn't providing their economic framework is another matter.

The Fed has never provided Chinas banking frame work ,china used the feds frame work only when trading outside of china 

Lookup the economic model of James Madison that's the model China uses and what followed in the USA

Edited March 12, 2023 by Long time lurking

[DurhamBorn]

1 hour ago, MrXxxx said:

Does this then mean more companies will have stock re-issues, further diluting stock holdings via the negative effects of 'revision to mean' and 'inflation'?

Yes,so equity will be diluted away unless they turn free cash flow positive to fund business growth,only really good companies will pull it off.It also means that assets already built slowly become worth more.People forget,but the likes of Amazon pay hardly any dividends,so even if the share price stood still for a decade its still a terrible investment during inflation.This cycle favours asset backed companies because Capex can fall to make up for Opex increasing.Of course in 15 years as assets needs replacing the equation changes,but we are in year two of at least 10,maybe 30 years of this.

They need to let these banks go under without contagion.I bet a load of really woke rich are going to get skinned in that bank collapse.

[marceau]

12 minutes ago, Long time lurking said:

The Fed has never provided Chinas banking frame work ,china used the feds frame work only when trading outside of china 

Lookup the economic model of James Madison that's the model China uses and what followed in the USA

I don't know anything about China's banking framework. It's economic model, however, has been entirely dependent on the Fed. Without US treasuries its economy would have been stuck at the size it was in the 70s.

Edited March 12, 2023 by marceau

[Long time lurking]

5 minutes ago, Axeman123 said:

France is in decline and looking to extract, whereas China is on the up and playing father Christmas with investment. France has a history on the continent of old school collonialism (The British Empire was better than most of its time) whereas Russia has a history of Soviet era donations.

From where i`m sitting Russia seems to be offering/providing  the security and a stability while China provides the economic benefits 

Some will always say but they want the same as the west out of the deal which is correct ,the difference is they are offering something far more appealing than the west are, which for the last year has been nothing but threats and ultimatums  

[darkmarket]

23 minutes ago, Axeman123 said:

Have you ever read "guns, germs, and steel"? That author makes a very good case for why the west got such a headstart on other continents. There is no inherrent superiority IMO, just the fading advantage of a headstart on industrialisation.

That's a book which I found fairly convincing initially, but over time much less so. The sleight of hand is, as is common, related to what's missing.

The context for the relatively successful period in Western European affairs is more closely related to the encroachment of the Ottomans and the failure of the holy wars ostensibly aimed at driving them out. An interesting book partly on this subject is The Alexiad, which claims the target was less the Infidel and more the Byzantines. The nature of the failures lend credence to that viewpoint.

Those failures, the return of the texts of Ancient Greece which had been suppressed by the Romans, and the economic and military demands of the time were what led to industrialisation. A reasonably coherent Christian culture, combined with intellectual curiosity and freedom and need to innovate, led to radical changes which allowed for trade with the New World and access to previously monopolised trade routes.

What we're seeing now from China is an attempt to dominate the land route from it to Western Europe, and to end the freedom of the seas guaranteed by the Anglo-Saxon influence on world affairs. This is leveraged by transfers of intellectual property and capital that have no precedent in history, on the pretext of a Russian threat.

The idea that all this will lead to a coherent BRICS bloc, all of whose members have extremely different cultures and economies, is highly speculative. Until Lula's dubious victory, Brazil was already being exiled from the group. Russia-China tensions are being papered over, but Putin just announced a direct challenge to China's economic plans for 2025 and beyond. India has territorial disputes with China that brought the countries to war only a few decades ago. There are huge problems.

That's before you consider the governance model Xi is applying. After the insanity of zero-covid there, and his influence on other countries via global institutions often created by the UK, I find it hard to believe people still give him credence, aside from Putin who has little choice. China's internal politics and economy are one disaster after another. The three-child policy, if successful, indicates an imminent colonial policy that the African dictators who are enjoying Xi's largesse now won't easily be able to explain.

The world is in a very difficult place, there are no saviours. Perhaps the most dangerous element is the false dichotomy of Xi's neo-Maoist communism and Soros's totalitarian interpretation of liberalism. I will continue not to invest in either.

[Axeman123]

9 minutes ago, Long time lurking said:

And that`s why China have achieved the same in 30 years as what took the west 200+  along with, there was no innovation needed to get to that point as the west had already done it 

I think they (and Japan before them) have done something unique in human history, they have collectively chosen to synthesise a novel culture by conciously adopting elements of the hegemon's one without being absorbed into it wholesale. The stereotypical conformity and collectivism of peoples in that part of the world making that possible may mean that it is never repeated.

14 minutes ago, marceau said:

It's equalitarian prog horseshit. Exactly the line of thinking that landing us in this mess in the first place.

I can see how some people could take it's conclusions in that direction, it leaves a lot of scope with how narrow it is. My takeaways from it would probably horrify the author tbf.

It is just one of many books I have assimilated into my own world view. My view is that culture springs from living conditions and economic incentives. A subsistence farming village will never spontaneously develop a sea faring merchantilist culture or institutions, an industrialising society will never spontaneously develop a space-faring culture and so on. In that context the farming and then industrial headstart of the old world lead to accelerated evolution of culture.

[Long time lurking]

3 minutes ago, marceau said:

I don't know anything about China's banking framework. It's economic model, however, has been entirely dependant on the Fed. Without US treasuries its economy would have been stuck at the size it was in the 70s.

You are confusing $ with treasurers and you are right about them being stuck in the 70`s without $ as that is what it had have to have to trade with the outside world that is the $ hegemony 

What you miss thought is everything inside of China is funded by the Renminbi  ,which the central bank prints at will as it`s the the Yuan is pegged to the Dollar it`s basically a twin banking system developed to allow huge funding of targeted sectors of the economy when the loser in that funding race go bust they just segregate that money from the economy it`s QE without consequence for the central bank  

It`s a hard system to work out and it`s getting harder ,i had a link that done a good job of explaining the intricacies  but that link no longer says what it said 5 years ago   Yuan/Renbi are one of the same now 

[marceau]

14 minutes ago, Axeman123 said:

I can see how some people could take it's conclusions in that direction, it leaves a lot of scope with how narrow it is. My takeaways from it would probably horrify the author tbf.

It is just one of many books I have assimilated into my own world view. My view is that culture springs from living conditions and economic incentives. A subsistence farming village will never spontaneously develop a sea faring merchantilist culture or institutions, an industrialising society will never spontaneously develop a space-faring culture and so on. In that context the farming and then industrial headstart of the old world lead to accelerated evolution of culture.

Agree, and of course I can't prove his intent or beliefs. It's outcome is pure prog though, and it's become part of equalitarian canon that paved the road to DEI etc.

The simply observable truth is that peoples are genetically different and superiority absolutely exists, both between groups and within groups.

Edited March 12, 2023 by marceau

[MrXxxx]

1 hour ago, Long time lurking said:

except commerce will always trump politics

Show me a principled man and I will show you a pauper!