Credit deflation and the reflation cycle to come (part 8)

[Talking Monkey]

21 minutes ago, DurhamBorn said:

Exactly that.I had the multiplier at minus from 88 until 96 ie bennies were slowly falling compared to working so the bad incentive was getting less,only very very slowly,but i had it slightly minus.The Brown budgets turned the multiplier to a plus,bennies were then slowly becoming a better and better option.The multiplier grew and grew.It could of been turned when Osborne tried,there was still time and he nearly did,but they bottled the main work.Once the inflation cycle kicked it and the government continued to inflation link the multiplier increased again.So much its now one of the biggest drivers of the collapse.In simple terms the velocity is such that it is bursting up and up through income barriers.Its already past where over 50% would be better not working.Of course what then happens is the inflation then increases again.The bennie system cannot survive in its present form.Labour will try to take the rest of the countries savings to consume on welfare,but the choice will be cut bennies or collapse the state,then bennies go to zero.

 

Is there enough time for a controlled reduction in bennies though DB. Watching over the years how politicians dodge difficult choices and the acceleration of the bennies cohort both growing in number and consuming from the productive it looks like somewhere down the line in a few years, not many years it will be a massive reduction in bennies in a very dislocating manner. I think the slow, managed, not too uncomfortable for all rebalancing of the economy, where bennies are slowly cut over many years option is gone. 

[Loki]

3 minutes ago, Talking Monkey said:

Is there enough time for a controlled reduction in bennies though DB. Watching over the years how politicians dodge difficult choices and the acceleration of the bennies cohort both growing in number and consuming from the productive it looks like somewhere down the line in a few years, not many years it will be a massive reduction in bennies in a very dislocating manner. I think the slow, managed, not too uncomfortable for all rebalancing of the economy, where bennies are slowly cut over many years option is gone. 

(New) Order from chaos is how they do things 

[Yadda yadda yadda]

10 minutes ago, Talking Monkey said:

Is there enough time for a controlled reduction in bennies though DB. Watching over the years how politicians dodge difficult choices and the acceleration of the bennies cohort both growing in number and consuming from the productive it looks like somewhere down the line in a few years, not many years it will be a massive reduction in bennies in a very dislocating manner. I think the slow, managed, not too uncomfortable for all rebalancing of the economy, where bennies are slowly cut over many years option is gone. 

It looks like being an IMF-like event. A rapid deterioration in public finances that forces significant spending cuts. Possibly accompanied by a bridging loan from the IMF or some other body with strings attached.

[sancho panza]

1 hour ago, DurhamBorn said:

Its already past where over 50% would be better not working.Of course what then happens is the inflation then increases again.The bennie system cannot survive in its present form.Labour will try to take the rest of the countries savings to consume on welfare,but the choice will be cut bennies or collapse the state,then bennies go to zero.

 

As if on cue.

This wont be going to workers on £20k a year eeking out a life in an HMO.

This thread in it's various forms has really openend my eyes to the problems posed by a runaway welfare state and the poor beggars being expected to fund it.
 

https://uk.finance.yahoo.com/news/uk-households-cost-of-living-payments-150724054.html

Eight million households on means-tested benefits will receive £299 as their final cost of living payment to help with high food and energy bills from this Tuesday.

Payments will be made across the UK by the Department for Work and Pensions (DWP) between 6 and 22 February.

Who receives this cost of living payment?

The full list of benefit recipients that qualify for the third cost of living payment are those who are eligible and receive at least one of the following:

• Universal Credit;

• Income-based Jobseekers Allowance;

• Income-related Employment and Support Allowance;

• Income Support;

• Working Tax Credit;

• Child Tax Credit;

• Pension Credit

Edited February 7 by sancho panza

[Harley]

 

19 minutes ago, sancho panza said:

As if on cue.

This wont be going to workers on £20k a year eeking out a life in an HMO.

This thread in it's various forms has really openend my eyes to the problems posed by a runaway welfare state and the poor beggars being expected to fund it.
 

https://uk.finance.yahoo.com/news/uk-households-cost-of-living-payments-150724054.html

Eight million households on means-tested benefits will receive £299 as their final cost of living payment to help with high food and energy bills from this Tuesday.

Payments will be made across the UK by the Department for Work and Pensions (DWP) between 6 and 22 February.

Who receives this cost of living payment?

The full list of benefit recipients that qualify for the third cost of living payment are those who are eligible and receive at least one of the following:

• Universal Credit;

• Income-based Jobseekers Allowance;

• Income-related Employment and Support Allowance;

• Income Support;

• Working Tax Credit;

• Child Tax Credit;

• Pension Credit

What's Income-based Jobseekers Allowance? Could be coming our way!

But regardless, I'll see their "FU" and raise them a "right, minimal VAT too"!

Goes off to the Marketplace, etc. Plus just repurposed a load of stuff this morning.

Actions have consequences my kleinerpolokinder!

Edited February 7 by Harley

[sancho panza]

Interesitng piece here from the Sceptic.

quite a few on here, not least @Cattle Prod have cited the seizure of foreign assets by the US/UK/EU as the game changign moment( froma geopolitical perpsective)of the last two years ,driving the process of dedollarization and actively pushing BRICS++ to trade their commodities in other currencies.It only dawned on me when people on here explained it.

this piece also highlights how the Russians appear to haev dodged the sanctions

in anotehr 'no sh1t sherlock' moment, it turns out we're now buying more Russian gas than we were before the war.

we really are led by idiots in the West at the minute.

https://dailysceptic.org/2024/02/06/the-russia-sanctions-didnt-work/

The Russia Sanctions Didn’t Work

by Noah Carl

6 February 2024 9:00 AM

One month after Russian tanks rolled across the border, President Biden announced that “the ruble was almost immediately reduced to rubble” and “the Russian economy is on track to be cut in half”. Likewise, the French Finance Minister Bruno Le Maire foresaw “the collapse of the Russian economy”. Russia “was ranked the 11th biggest economy in the world before this invasion,” Biden added. “Soon, it will not even rank among the top 20”.

How have these predictions panned out?

Not well. As an article in the FT notes, “Russia grew faster than all G7 economies last year and the IMF forecasts it will again in 2024”. So not only has the Russian economy failed to collapse – let alone be cut in half – but it’s actually growing at a steady clip. According to the IMF, Russia grew 2.6% in 2023, as compared to 0.8% in France, 0.5% in Britain and –0.3% in Germany.

A big problem for the West is that the stuff Russia sells – oil and gas – is extremely useful. So one way or another, countries are going to try to get their hands on it. This includes Europe. As of Q3 2023, Russia still accounts for 12% of the EU’s natural gas imports – and more than 20% of its fertiliser imports. In fact, EU imports of Russian LNG have jumped 40% since the invasion began so that EU countries now account for the majority of Russia’s LNG exports.

Another big problem is that Russia has a strong ally in China, the world’s second most powerful country and the main geopolitical rival of the US. While China has refrained from supplying lethal aid to Russia for sound strategic reasons, it absolutely wants to avoid a scenario where the Russian state falls apart. As I wrote of the Chinese last summer, “they can’t tolerate a defeated Russia but can easily live with a weakened one”.

Indeed, there’s strong evidence that China is helping Russia to evade Western sanctions. Since the war began, Chinese exports to Russia have grown 40%. And its exports to Russia’s neighbours have risen even more. China is now selling 63% more goods and services to Kazahkstan, and its exports to Belarus and Georgia have more than doubled. Did they suddenly unearth massive new markets in central Asia, or are they just selling sanctioned products through the back door?

Chart by Robin Brooks.

Interestingly, the pattern is similar when you look at German exports (shown above). Shortly after the start of Russia’s invasion, the total value of goods sold to Kyrgyzstan, Armenia, Georgia and Kazakhstan went through the roof. As economist Robin Brooks notes, “it’s obvious this stuff is going to Moscow”.

If there’s strong demand for something, preventing people from supplying that thing is always an uphill battle. This is why prohibition didn’t work: people still wanted alcohol and as a result bootlegging became widespread. It’s the same with sanctioned products. The Russians still want them and are willing to pay hard currency, so sellers find a way around the sanctions.

Of course, the relative ineffectiveness of the sanctions against Russia’s economy isn’t the worst part. The worst part is they’re hurting Europe – including Britain.

Edited February 7 by sancho panza

[onlyme]

5 minutes ago, Harley said:

 

What's Income-based Jobseekers Allowance? Could be coming our way!

 

Inlaw lost their job recently, over 100 applicants in competition for admin/support jobs in their locaility,

The jobs market has reversed remarkably quickly and rapidly getting worse if that is any indicator of actual demand. Other rlative have had big cuts in their global workforce, my work dropped to virtually nothing in a few months - busy working on house instead. Zero income tax from me next year very likely.

[Axeman123]

1 hour ago, JMD said:

Anyway i have occasionally over the years dropped what I consider the important topic of LVT into the thread. Thing is each time I have got pushback along the lines of 'LVT is just another wealth tax, so it must automatically be rejected'. Interestingly no objections this time, though I think that might be because I'm now on mute!

I am ambivilent on LVT. It could easily be a way to drag the struggling middle down to the proletariat by shaving down their assets in the later years. I do like the idea of owning land/housing and just pulling up the drawbridge at retirement. Property taxes in the US function in this way, and actively push people out of gentrifying neighbourhoods as the taxes spiral acting as a form of social cleansing. The flip side is that the lack of an LVT is stopping people buying to start with.

An LVT that exempted genuine personal primary residences and small holdings could work for me, but the implementation would be a minefield.

[Loki]

3 minutes ago, Axeman123 said:

the implementation would be a minefield.

Nothing that 1000 or so well-paid competent government employees can't handle

[Long time lurking]

 

[Harley]

42 minutes ago, onlyme said:

Inlaw lost their job recently, over 100 applicants in competition for admin/support jobs in their locaility,

The jobs market has reversed remarkably quickly and rapidly getting worse if that is any indicator of actual demand. Other rlative have had big cuts in their global workforce, my work dropped to virtually nothing in a few months - busy working on house instead. Zero income tax from me next year very likely.

My partner works only as far as minimising tax allows.  Always a risk of no job after she furloughs herself but she increasingly couldn't care.  Indeed would probably welcome it.  Anyways, she needs to spend more time in the allotment and I'm thinking of ploughing up part of a field and she wouldn't let me have a tractor without first selling the Harley.  Actions have consequences!

[janch]

I usually hate R4 "More or less" stats programme as they seem so well-versed in making the stats prove anything they want to, so basically BBC propaganda.  Today's programme was a bit different comparing council tax in Westminster (the lowest in the country yet property prices the highest) with the situation in Hartlepool.  I knew the distortion was bad but this is ridiculously bad and hasn't been looked at since council tax was first introduced in 1993:

https://www.bbc.co.uk/programmes/m001vztb

It's well worth a listen IMHO

[geordie_lurch]

11 minutes ago, Long time lurking said:

 

They must have a screw (or several bolts) loose expecting that sort of increase

[Axeman123]

1 hour ago, Loki said:

1000 or so well-paid competent government employees

In all human history have there been that many tho?

[DurhamBorn]

3 hours ago, Libspero said:

Thanks.

This bit worries me personally.   How much of my pension/investments are they planning to help themselves to..  

 

All of it in the end without welfare reform.They might take it over a few generations though by freezing allowances so low inflation cuts it in half then cuts that in half.Frozen allowances are the tell,once that happens they are taking it through inflation.

[Democorruptcy]

3 hours ago, Libspero said:

Thanks.

This bit worries me personally.   How much of my pension/investments are they planning to help themselves to..  

 

Just plan on them taking everything, then anything they leave you with is a bonus.

[Libspero]

12 minutes ago, Democorruptcy said:

Just plan on them taking everything, then anything they leave you with is a bonus.

 

An aspirational box perhaps

[Long time lurking]

3 years says hold my beer 

All exit stage left ?

 

[Long time lurking]

36 minutes ago, Democorruptcy said:

Just plan on them taking everything, then anything they leave you with is a bonus.

They will be forced into buying more and more government debt ,see Japan 

It`s the only pot of honey left

[Democorruptcy]

S&P 500 smashes through 5000 for the first time. Uncle Dave is absolutely bouncing.

[Long time lurking]

 

[Long time lurking]

 

[Loki]

18 minutes ago, Long time lurking said:

3 years says hold my beer 

All exit stage left ?

 

Markyboy back on life support 

Edited February 7 by Loki

[headrow]

27 minutes ago, Democorruptcy said:

S&P 500 smashes through 5000 for the first time. Uncle Dave is absolutely bouncing.

Dec 2021 was the previous top. Vodafone has halved in price since

 

When the sell off inevitably comes VOD will be floundering like an African on a Kent beach

[King Penda]

5 hours ago, DurhamBorn said:

Exactly that.I had the multiplier at minus from 88 until 96 ie bennies were slowly falling compared to working so the bad incentive was getting less,only very very slowly,but i had it slightly minus.The Brown budgets turned the multiplier to a plus,bennies were then slowly becoming a better and better option.The multiplier grew and grew.It could of been turned when Osborne tried,there was still time and he nearly did,but they bottled the main work.Once the inflation cycle kicked it and the government continued to inflation link the multiplier increased again.So much its now one of the biggest drivers of the collapse.In simple terms the velocity is such that it is bursting up and up through income barriers.Its already past where over 50% would be better not working.Of course what then happens is the inflation then increases again.The bennie system cannot survive in its present form.Labour will try to take the rest of the countries savings to consume on welfare,but the choice will be cut bennies or collapse the state,then bennies go to zero.

 

I’ve been doing my normal piss taking on forums dedicated to starving people .i proudly showed them this weeks food bill and announced my shoping was cut to the bone and I can’t see where I could cut back any more.I’m like it’s just over 7 quid a day so can’t moan . They are claiming my food bill is realy around £3.60 a day