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

[Wight Flight]

26 minutes ago, Yadda yadda yadda said:

NWVP would presumably want control of that and would therefore need to charge a rent appropriate to pay the loan and maintenance.

Good luck with that.

Nobody can afford to pay £3k per month to rent my place.

[baffledbyzirp]

2 hours ago, Yadda yadda yadda said:

Of course there is a point in blaming the Government, they set the rules of the game. They, if you include the BoE as Government, which it is just unelected, set the low interest rates and caused the high house prices. They chose measures of inflation that excluded house prices but measures of GDP that included them though imputed rents. People should always take responsibility for their own actions. However, they have every right to push a large chunk of blame at the Government. It was Government policy to push debt on the public, it was Government policy to pursue inflationary spending, it was Government policy to increase the size of the population with immigration and it was Government policy to restrict housing supply. It was also Government policy to make the rental market shit, short term and insecure. There are plenty of lampposts in Westminster and the City of London. Someone of them have fancy designs. All are capable of carrying a dead weight.

The theory on interest rates controlling inflation breaks when the inflation is largely caused by Government spending. The way to control inflation now is a combination of rate rises and spending cuts.

I accept that government has contributed to the current situation but feel it is too simple to always blame the state for society's ills. We get the government we deserve, which we elect. When Osborne attempted to slow increases in public spending he was roundly criticised for austerity. If we search for scape goats we might equally blame international banking cartels, The Fed, the US government, WEF, education, Capitalism or Neoconservatism. Tony Blair got the ball rolling, yet as a PM he was extremely popular. Children are always reluctant to go to bed so somebody has to be adult.

This thread is full of people who are profoundly sceptical about government and live prudent lives in order to protect themselves from penury in old age. Many of the problems witnessed today are due to excessive spending and a reluctance to live within reasonable economic boundaries. The quick-buck, short-term, look-at-me hucksterism promoted on platforms such as TikTok where tanned arseholes sporting bulging muscles, false boobs and plastered with tattoos drive Lambos in the sun while showing off their new watch and implausibly white teeth. Reality will be far more prosaic but it won't stop people overreaching and when they do will they blame themselves or look elsewhere? 

[Joxer]

1yr and 2yr gilt yield hit a 1 year high today

[Ash4781b]

There’s going to be an issue with the new inflation rate applied to state pension benefits. Inflation not falling fast enough. The politicians are boxed in with a triple lock on pensions. And probably an uplift to benefits. 

[crashmonitor]

Apparently a woman rang the BOE yesterday to say she had seen some posts on Dosbods that inflation would be spiralling out of control by next Summer. Don't worry there are some choppy waters ahead but we will have things under control by next Summer and inflation will be back to 2%. It's all transitory Dears.

 

Andrew Bailey (2022)

 

 

[Heart's Ease]

35 minutes ago, Ash4781b said:

There’s going to be an issue with the new inflation rate applied to state pension benefits. Inflation not falling fast enough. The politicians are boxed in with a triple lock on pensions. And probably an uplift to benefits. 

Was musing today about how they could possibly fudge September CPI with only weeks, really, to go.

[DurhamBorn]

1 hour ago, wherebee said:

Have you mapped the impact of foreign retail money flowing in as the pound collapses, to buy UK assets?  Trust me, from my time in HK and elsewhere in Asia, 90% of asian retail investors still see the UK as the land of paddington bear, bowler hats, honesty, and james bond.  I've posted on here before that almost every professional I knew in Hk and Singapore had property in either UK, Australia, or Canada, and the vast majority in the UK.

I could see a position where Uk housing looks very very cheap to singaporeans, chinese, indians, and they just pile in and grab any old shit they can in London and elsewhere that they know from TV (like Oxford).  They will NEVER recognise a collapse, even the riots in London a while back were discussed in circles I knew in HK as 'immigrant riots' and seen as a small problem.

In their desperation to keep the plates spinning, I could see a UK gvt supporting this inwards flow of money.  Ten houses in London could be ten million quid in GBP...

Yes i could,as i say housing wealth will be consumed now,that could be by foreign money buying it up.The government is allowing all UK wealth to be consumed down to nothing rather than say to bennies,sorry you need to be 35% poorer then flatline while wages grow.

[Sidd]

Gold and Silver rubber bands have snapped. Someone mend it quick!

[honkydonkey]

3 minutes ago, Sidd said:

Gold and Silver rubber bands have snapped. Someone mend it quick!

Bought some Sibanye Stillwater just now.

Also bought some more Ashmore at £2. 

Edited June 21, 2023 by honkydonkey

[Sugarlips]

BBC radio news leading with “Sunak still on track to halve inflation by Christmas”

 

[Axeman123]

16 minutes ago, Sidd said:

Gold and Silver rubber bands have snapped. Someone mend it quick!

Gold looking OK, silver massacred, GDXJ looking pretty decent all things considered. Odd.

Never fear though:

 

[Loki]

29 minutes ago, DurhamBorn said:

Yes i could,as i say housing wealth will be consumed now,that could be by foreign money buying it up.The government is allowing all UK wealth to be consumed down to nothing rather than say to bennies,sorry you need to be 35% poorer then flatline while wages grow.

Can people still exit the market with mad gainz if this happens?

[Eventually Right]

18 minutes ago, Axeman123 said:

Gold looking OK, silver massacred, GDXJ looking pretty decent all things considered. Odd.

Never fear though:

 

Stolen from Twitter 

[Democorruptcy]

2 hours ago, Sugarlips said:

I’m getting the impression that the banks are going to be clobbered by the government for taking excess profits just as they did for Shell/Bp.

Which dovetails nicely into hey, banks are bad so let’s get rid of them and have these nice CBDC’s instead...

Truss and Quasi would advise against thinking about clobbering the banks. It was when they asked the Treasury to look into not paying the banks the base rate on overnight deposits at the BoE, that they were driven out of office. At 4.5% that's now gifting banks £40bn a year from taxpayers.

[honkydonkey]

28 minutes ago, Axeman123 said:

Gold looking OK, silver massacred, GDXJ looking pretty decent all things considered. Odd.

Never fear though:

 

Don't forget SILG which is Global X Silver Miners in GBP on the LSE.

Admittedly it is a bit heavily skewed to the top few. (first column)

Edited June 21, 2023 by honkydonkey

[Yadda yadda yadda]

2 hours ago, baffledbyzirp said:

I accept that government has contributed to the current situation but feel it is too simple to always blame the state for society's ills. We get the government we deserve, which we elect. When Osborne attempted to slow increases in public spending he was roundly criticised for austerity. If we search for scape goats we might equally blame international banking cartels, The Fed, the US government, WEF, education, Capitalism or Neoconservatism. Tony Blair got the ball rolling, yet as a PM he was extremely popular. Children are always reluctant to go to bed so somebody has to be adult.

This thread is full of people who are profoundly sceptical about government and live prudent lives in order to protect themselves from penury in old age. Many of the problems witnessed today are due to excessive spending and a reluctance to live within reasonable economic boundaries. The quick-buck, short-term, look-at-me hucksterism promoted on platforms such as TikTok where tanned arseholes sporting bulging muscles, false boobs and plastered with tattoos drive Lambos in the sun while showing off their new watch and implausibly white teeth. Reality will be far more prosaic but it won't stop people overreaching and when they do will they blame themselves or look elsewhere? 

Some high quality ranting in that 2nd para . Of course the people you describe deserve to get screwed. Although they will probably simply go bankrupt losing little in the way of assets.

My point is more that a lot of people had only the choice between buying an overpriced but superficially affordable house or renting on a short term basis with an often even more expensive monthly bill. Once someone has been treated badly by a couple of landlords it is unsurprising that they will take risks to escape.

I don't think we can blame the voters either. Our democracy has been shown to be a complete sham. The parties both say one thing and do another that is diametrically opposed.

[Yadda yadda yadda]

2 hours ago, Wight Flight said:

Good luck with that.

Nobody can afford to pay £3k per month to rent my place.

Clearly it doesn't work at high leverage and I should think landlords will simply be repossessed and chased in the courts for other assets.

[Yadda yadda yadda]

34 minutes ago, Sugarlips said:

BBC radio news leading with “Sunak still on track to halve inflation by Christmas”

 

"Is the halving in the room with us now?"

[Kevin Redshaw]

Knowledge is power, and most people know nothing about economics. Today the BBC announced that UK's national debt Is now equal to Britain's GDP. Most people have no idea about what terms like 'National Debt' and GDP even mean. In this video I quickly and simply explain what the national debt is and what GDP actually measures. I also  explain why the UK's National Debt has risen so dramatically. You might also want to know what the implications are of the UK's national debt reaching 100% of GDP for you and your families

 

[Plan-b]

8 minutes ago, Kevin Redshaw said:

Knowledge is power, and most people know nothing about economics. Today the BBC announced that UK's national debt Is now equal to Britain's GDP. Most people have no idea about what terms like 'National Debt' and GDP even mean. In this video I quickly and simply explain what the national debt is and what GDP actually measures. I also  explain why the UK's National Debt has risen so dramatically. You might also want to know what the implications are of the UK's national debt reaching 100% of GDP for you and your families

 

When you say "I -- explain" does that mean this is you in this Vid?                   

[Xtal]

38 minutes ago, Kevin Redshaw said:

Knowledge is power, and most people know nothing about economics. Today the BBC announced that UK's national debt Is now equal to Britain's GDP. Most people have no idea about what terms like 'National Debt' and GDP even mean. In this video I quickly and simply explain what the national debt is and what GDP actually measures. I also  explain why the UK's National Debt has risen so dramatically. You might also want to know what the implications are of the UK's national debt reaching 100% of GDP for you and your families

 

Nice one. Been following this thread for 5+ years and I finally understand the implications.

[Castlevania]

5 hours ago, DurhamBorn said:

The area,we would boom again if we were allowed to use our own resources.I say im Northumbrian not English and mean it,its since we were taken over by Southern Kings that we got poor.The government might as well be in Winchester for the north,nothings changed.

You sound like my old Neapolitan housemate with his constant “fucking Garibaldi” replies to anything he was unhappy with.

[Errol]

 

[JMD]

4 hours ago, Lightly Toasted said:

No, but it is responsible for monetary and fiscal policy, which inevitably drive behaviour at population level.

Incentivise stupidity and greed (and laziness and entitlement) = get more of it, until at some point the whole economy is swamped. 

Yes I agree. Appologies for thread derail but my general thoughts are...

Over time national interest and (the now quaint outdated?) concept of moral hazard have been smashed to pieces by the prevailing forces of globalisation (externalities) and woke/cultural marxism (internalities). Our polos probably never stood a chance as progressive-kindness dominated the zeitgeist. However the real kicker I think is that the public (and I include myself) were hoodwinked by a naive beleif in 'democracy', but thing is we never had it, plus that particular voting system fails on its own terms, because just encourages outlandish political promises and over spending.

It's a tragic state of affairs, and seems like we are approaching an end of the road, but perhaps where we now find ourselves was always inevitable? Perhaps Asia will learn from our mistakes or will itself be fated to just repeat them, who knows? The only ultimate solution I can see is a return to sound money but I can't see that happening any time soon, or even how that would even begin (or be allowed!!) to happen.

[Kendo]

3 hours ago, Eventually Right said:

Stolen from Twitter 

Why has he got an image of Iain Duncan Smith on his computer?