Credit deflation and the reflation cycle to come (part 6)

[montecristo]

6 hours ago, King Penda said:

That’s just it I’m nuts I can’t take life seriously there’s a reason I work nights and it’s to keep away from managers .I know I have to conform to some extent  but I do the bare minimum and change jobs frequently what controls me is debt it’s my silver bullet 

As in you are debt free?  

[Red Debt Redemption]

On 18/06/2023 at 23:39, PatronizingGit said:

after all this, you really think they want the UK to succeed? any of them?

they are global communists. They want the average brit to be no better off than the average indian than the average Columbian. Harmonization, homogenization. Pit villages mean no more to them than some obscure village in Kerala.

 

One thing they are is malthusian. All the stuff about Gates wanting to 'kill' half the worlds population is probably nonsense, but they certainly want to reduce birthrates father, faster. They believe one way to do that is to import as many as possible into western societies where women are socially pressured to spend their child bearing years in education & then economically forced to spend the rest of them working for the man. That millennials or gen Z's will never be able to start families isnt a flaw for them, but a function. 

Birthrates are already below replacement since 1973 for the UK the imports are to maintain 'growth'

[jamtomorrow]

1 hour ago, Jay said:

It could happen..credit deflationary bust..house prices fall leading to lower spending..corporate and government spending down…qe back and emergency rate cuts..boe front runs the deflation by aggressive monetary expansion policy…2008 style..probably next year in the uk…if rates do fall that low then it’s not a good sign of the uk economy health..demand destruction…

Systemic instability is the real nightmare IMO. Prolonged periods of tight or loose policy is one thing, but a policy environment that whipsaws between increasing extremes would be quite another.

Is there any evidence today's policymakers are alive to systemic stability? The speed with which today's system responds to changes in conditions (see: recent bank runs in US) suggests a dire and urgent need for systemic thinking, because it means the *gain* in the system is historically high.

I for one would rather not find out what happens when it hits 11 on the dial.

[RJT1979]

1 hour ago, montecristo said:

As in you are debt free?  

He's been cursed by the joo joo that the Cameroonian bunnies put on him. He is forever in their debt and will be slowly buying them a 3 bed in Uttoxeter 

[M S E Refugee]

I'm going to watch Mr Hunter later.

 

 

[Stuey]

2 hours ago, Jay said:

 

or cost push inflation with smaller supply leading to inflation rises and further rate rises rises..unless we have erdogan in charge who cuts rates in inflationary times but he is a one off..

 

I'm predicting cost push deflation. Probably the best sort 

[MrXxxx]

9 hours ago, Axeman123 said:

I once worked with an incredibly stupid man, who insisted it was impossible to ever see the moon in daylight for some reason - I don't even remember how that came up.

One day I pointed to the moon and asked "so whats that then, scotch mist?". He insisted it was just clouds, but showed signs of glassy eyed panic like I had just wrecked his sense of reality.

He must have been getting on for 50, had he never looked up in all his years? Had he seen the moon in daylight before, and blocked it out thinking it a hallucination?

Mmmm you just be careful 'Mr Know it all' when you go on holiday, as if you go too far in one direction you do know that you will fall off the edge don't you?! :-)

[PatronizingGit]

2 hours ago, Red Debt Redemption said:

Birthrates are already below replacement since 1973 for the UK the imports are to maintain 'growth'

The average in working age household is a client rather than contributor to the state. It may be growth in 'more mouths = bigger economy' but in terms of long term economic sustainability, it achieves absolutely nothing. 

[Cattle Prod]

Another reason the UK is something of an outlier, and especially in thrall to it’s bond market:

Zero long term mortgages in the UK, about 98% short term and variable. I’m in the 2% medium term but I’d have loved a long term one. The US has zero variable and 80% long term. The majority of yanks are getting their mortgages inflated away. I didn’t know that France was even higher! Even Spain is up there. It’s clearly a simple matter to offer long term fixes by locking in a rate with long bonds.

Question is: why has this never been offered in the UK? Why is that shitstain Gove only bringing it up now like it’s a bright idea? Genuine question, I don’t know.

https://www.telegraph.co.uk/personal-banking/mortgages/gove-says-25-year-fixed-rates-could-solve-mortgage-crisis/

 

[MrXxxx]

10 hours ago, DurhamBorn said:

Oh look The Telegraph ,they knicked our "groupthink" as the reason for the BOE being shit.

https://www.telegraph.co.uk/news/2023/06/19/inquiry-into-bank-of-england-to-save-britain-from-penury/

Its a very good article though pulling together our work.Notice the last bit.Collapse .

No mention though of the reason behind it all,monetising the welfare budget for governments.

..."Don't blame it on the sunshine, don't blame it on the BoE, don't blame it on the Covid, blame it on the BREXIT"

Edited June 20, 2023 by MrXxxx

[MrXxxx]

10 hours ago, DurhamBorn said:

Oh look The Telegraph ,they knicked our "groupthink" as the reason for the BOE being shit.

https://www.telegraph.co.uk/news/2023/06/19/inquiry-into-bank-of-england-to-save-britain-from-penury/

Its a very good article though pulling together our work.Notice the last bit.Collapse .

No mention though of the reason behind it all,monetising the welfare budget for governments.

QUOTE:

"Apparently a cost of living crisis, historic inflation and a potential electoral wipeout is not enough to bring about a proper reset. And round and round we go, until we are hit by a crisis that even the untouchable Bank can’t recover from."

'Been there, seen that' in the 70's, and we all know what happened in the early 80's when the UK populations said "Enough!"

[DurhamBorn]

5 hours ago, Stuey said:

Energy prices is the main driver, yeah. A key input for a vast number of processes - prices down 80% or so in less than twelve months. We're just waiting for the lag to pass. 

And I said 1% rates before 6%, before that starts getting distorted...

I think the UK will be sticky due to the massive amount of people who are inflation linked on bennies and pensions,that is forcing wages to increase,even though less than them and inflation.It could be the UK has around 3% extra inflation than other countries,thats what i see,around 3% more,so i suspect an average 3%pa loss in currency buying power over the cycle.There is a window for inflation to fall into outright deflation for a small period due to lags,but the scale of this inflation is causing a lot of damage underneath.The US and EMs are using the time to onshore or expand their production,the UK and EU have allowed the US to destroy out competitive industries by putting a wedge between us and Russian energy.

I think its likely we swing lower in inflation then a rise back to the 4% to 5% levels that will see rates between 4% and 4.5% in the mid term.There will be some relief on mortgages,but still much longer term pain from where they were.

[Democorruptcy]

Hussman downdate:

https://www.hussmanfunds.com/comment/mc230619/

 

[sleepwello'nights]

19 hours ago, BoSon said:

I know someone that did, around the turn of the century, went working in Aus and didn't have time or desire to sort out the mortgaged house. He came back a few years later so presume his debt was still on the books, but if he'd gone for long enough wouldn't the 6 year rule (or whatever it is) for chasing an unacknowledged debt come into effect?

 

No. A mortgage loan is a specialty, The limitation period for recovery action is extended to 12 years.

Mortgage Shortfalls

Mortgage shortfalls have a limitation period of 12 years for the amount of money (the “capital”) that you borrowed. Keep in mind that the limitation period for the interest on your mortgage is still six years. 

[sleepwello'nights]

16 hours ago, BoSon said:

It's one of many real uses for those virtual reality goggles. Change people's perception to suit their condition. Could also recolour stuff to make it more visible for the colour blind, and many more similar alterations of reality.

I read that they already do a similar trick for the meat counter, the lighting has a reddish tinge to make the meat look more appealing. 

 

[BoSon]

9 minutes ago, sleepwello'nights said:

I read that they already do a similar trick for the meat counter, the lighting has a reddish tinge to make the meat look more appealing. 

 

Yeah was thinking the low lighting may help hide all the manky 'fresh' food.

[sleepwello'nights]

13 hours ago, Wight Flight said:

I know the tests were done at Dunsfold. FIL had to sign it off.

My dad was an airframe fitter at Vickers in Weybridge/West Byfleet/Brooklands. He was made redundant at the end of the 1960s.We moved to near Slough where he thought his engineering skills would get him work. At 46 he must have been thought to be too old. 

He then drifted in various jobs until he divorced. He seems to have prospered then and remarried twice. His second wife died, he wasn't a bigamist. Sadly I never really knew him. Once he freed himself from the virtually continuous arguments with my mother he used his energy to prosper.  

[Wight Flight]

1 minute ago, sleepwello'nights said:

My dad was an airframe fitter at Vickers in Weybridge/West Byfleet/Brooklands. He was made redundant at the end of the 1960s.We moved to near Slough where he thought his engineering skills would get him work. At 46 he must have been thought to be too old. 

He then drifted in various jobs until he divorced. He seems to have prospered then and remarried twice. His second wife died, he wasn't a bigamist. Sadly I never really knew him. Once he freed himself from the virtually continuous arguments with my mother he used his energy to prosper.  

FIL was also made redundant. He was lucky to get a job fixing planes for BA until he retired from that in his 60's, then ended up running my Heidelberg platten for another few years. Still does one day a week gardening at 83.

They don't make them like that anymore.

[Himura]

Market pushing BOE to go 50bps. Not good

 

[MrXxxx]

17 hours ago, BoSon said:

It's one of many real uses for those virtual reality goggles. Change people's perception to suit their condition. Could also recolour stuff to make it more visible for the colour blind, and many more similar alterations of reality.

I had these virtual reality goggles years ago made by Worthingtons, they did exactly as you described! :-)))

[Sugarlips]

1 minute ago, Himura said:

Market pushing BOE to go 50bps. Not good

 

We need to rip the plaster and take the medicine, times up.

 

 

 

[Plan-b]

I'm still seeing forecasts of 0.25%

[MrXxxx]

This gentleman speaks so much sense, from an informed viewpoint, and in a non-technical way that anyone could appreciate...well worth anyone's 20 mins every morning to start the day with a datum:

 

Edited June 20, 2023 by MrXxxx

[Axeman123]

1 hour ago, Cattle Prod said:

Zero long term mortgages in the UK, about 98% short term and variable. I’m in the 2% medium term but I’d have loved a long term one. The US has zero variable and 80% long term. The majority of yanks are getting their mortgages inflated away. I didn’t know that France was even higher! Even Spain is up there. It’s clearly a simple matter to offer long term fixes by locking in a rate with long bonds.

Question is: why has this never been offered in the UK? Why is that shitstain Gove only bringing it up now like it’s a bright idea? Genuine question, I don’t know.

US 30yr mortgage rates are typically higher than short UK fixed ones. A quick google and Bank of America seem to offer a range of fixes from 5-30 years, however every one of the APR rates offered (based on the default Zip code/LTV the site starts at) starts with a 7 (except the 15yr at 6.3% APR for some reason). The majority of US borrowers choosing 30 years must just be cultural.

Gove saying long term fixes are solution from here is a bit rich. He will know full well that people struggling with 5% wouldn't voluntarily choose to pay 7% instead for peace of mind. The time to fix is when rates are low and you can afford the slightly higher rate, Gove's input is akin to telling a pennyless widow she should have taken out life insurance on late hubby when she had the chance IMO - in both cases that ship has sailed.

A bigger issue is just that the UK for years has run on the Martin Lewis/MSE model of keep ruthlessly moving supplier and campaign for them to "pass on" savings. This lead to all the gas supply issues where a man in a back bedroom could becom an energy supplier and undercut the big boys by having no hedges, take the money in the good times and then fold his tent at the first sign of wholesale prices rising. Mortgages have been the same, short-term fix and hopefully you can get a lower rate next time. Our entire culture around money has taken falling rates and prices as a given - and now the tide has turned.

38 minutes ago, Himura said:

Market pushing BOE to go 50bps. Not good

Sounds very good to me.

 

[Castlevania]

2 hours ago, Cattle Prod said:

Another reason the UK is something of an outlier, and especially in thrall to it’s bond market:

Zero long term mortgages in the UK, about 98% short term and variable. I’m in the 2% medium term but I’d have loved a long term one. The US has zero variable and 80% long term. The majority of yanks are getting their mortgages inflated away. I didn’t know that France was even higher! Even Spain is up there. It’s clearly a simple matter to offer long term fixes by locking in a rate with long bonds.

Question is: why has this never been offered in the UK? Why is that shitstain Gove only bringing it up now like it’s a bright idea? Genuine question, I don’t know.

https://www.telegraph.co.uk/personal-banking/mortgages/gove-says-25-year-fixed-rates-could-solve-mortgage-crisis/

 

Demand. People want cheap mortgages. How many people took out 2 year fixes in 2021 when they could have got a 10 year fix for less than a 100 basis points more.