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

[Harley]

16 minutes ago, JMD said:

Thank you for posting that McGilchrist video Harley. Ive just watched the interview and realise that I have his book so must now get round to actually reading it! It seems that McGilchrist's thesis - or at least his explanation/interpretation of it - has become darker and gloomier from what i remember it, back when i first became aware of it some years back.

For example in his recent lecture below. For first 18mins it is just a recap of his left/right hemisphere theory, however in the remainder portion he really shows that he 'gets it' - and describes the many awful social and economic consequences of left-brain thinking. 

It's interesting that on this thread we regularly comment that social collapse is inevitable because society no longer posseses the 'human clay' to prevent civil decay from happening. I think McGilchrist's theory might just provide the reasons behind why our human clay has become destroyed, and in the lecture below he hammers home the toxic and degenerative cognitive environment we now find ourselves in.

 

 

 

 

 

 

 

 

 

 

 

 

 

Ta.  His (large!) book "Master...." was delivered last week.  I just need to finish Sue Townsend first!

PS:  I was with him a while back.  An excellent time.  I'm also enjoying reading Unherd but not sure about the subs.

Edited April 8 by Harley

[Mandalorian]

5 minutes ago, Lightscribe said:

No such thing as sectors and cycles, just stick it in a passive 60/40 innit?

Passive 100 maybe. 

60/40?  Would rather shit in my hands and clap.

[Cattle Prod]

2 minutes ago, Lightscribe said:

No such thing as sectors and cycles, just stick it in a passive 60/40 innit?

There is the signal in the noise. Can you see what happened after Russian oil was sanctioned?

The interesting thing is that Vitol is a perfectly legal business with a nice office in central London quite near me. They are fond of Lambos. So the signal, as articulated in "The King of Oil" is that goverments need these sanctions to not work, and are well aware of it. They could have crippled Putin in weeks by banning the oil trading houses. But these trading houses grease the world economy, so they are tolerated, and even encouraged. If you think this is strange, consider that Israel was secretly supplied with oil by Iran for decades through a pipeline via the Gulf of Aquaba. The noise is everything else you listen to about Russia and Russian oil.

[Lightscribe]

20 minutes ago, wherebee said:

Perhaps the Chinese have decided it's time to expose the USD fiat in the run up to the election, just before the election campaigns start for Trump and Biden?

IN other news, GDXJ is 33% up on my startpoint.  42 is nice.  46 would be better.

Again the western brains can’t comprehend this. 

Gold has diverged from treasuries. No one wants US/EU treasuries. Inflation hasn’t been dealt with and China and India are calling the US’s bluff.

As the world turns insular and international assets have proven to be able to be seized and previous contract laws broken, why would they?

Gold is a multi-polar globally agreed medium of value without politics involved. They are not protecting themselves with gold going up, they’re protecting themselves against devaluation of currencies.

https://nitter.poast.org/angeloinchina/status/1776981521423106386#m

Edited April 8 by Lightscribe

[Cattle Prod]

13 minutes ago, Libspero said:

I guess if the estimates are wrong and there's really not a lot left it doesn't make much difference if we don't extract it now or later .

Would the same apply for our coal reserves ?   IIRC coal was the original source of town gas so in terms of strategic reserves/supplies perhaps equally important ?

Later is not an option without supporting infrastructure. Every region has a MEFS (miniumum economic field size). The UK's MEFS was quite small close to infrastructure, now it's blown out because of the taxation and uncertainty. And if you have to put in new infrastructure, you need a big one, which is no longer there.

Coal I don't know much about but I suspect it's much cheaper (seams close to the surface, on shore) than offshore oil and gas developments. The MEFS for a coal mine in @DurhamBorns garden is the price of a pickaxe.

[Heart's Ease]

On 04/04/2024 at 21:52, ThoughtCriminal said:

Interested to see what anyone thinks of this thread on gold and debt monetisation. 

 

Last few posts made me think of this from last week.

Both Luke Gromen and Grant Williams thought this thread from Jared was spot on. A couple  more tweets from it.

Run to gold to protect again loss from debt monetisation.

Noticed also Bitcoin is up to almost ATH.

 

 

[Harley]

7 minutes ago, Lightscribe said:

Again the western brains can’t comprehend this. 

Gold has diverged from treasuries. No one wants US/EU treasuries. Inflation hasn’t been dealt with and China and India are calling the US’s bluff.

As the world turns insular and international assets have proven to be able to be seized and previous contract laws broken, why would they?

Gold is a multi-polar globally agreed medium of value without politics involved. They are not protecting themselves with gold going up, they’re protecting themselves against devaluation of currencies.

https://nitter.poast.org/angeloinchina/status/1776981521423106386#m

It does me head in.  All those podcasts, mostly Americans pretty much only talking about what the Fed will do next.  Like a load of street junkies discussing the next shipment.  No all of course and some are waking up late.  You can really sort out the wheat from the chaff.

[Noallegiance]

27 minutes ago, wherebee said:

GDXJ to 100USD?

Jesus, I'd cream my pants. That would give me enough profit to buy half a small house in my town.

So difficult not to think in these terms.

If a couple of the silver miners I'm in do only half of what they did in 2010 I'd consider ceasing work. The numbers if they did the same or in excess of the last silver run are simply mind-boggling, considering the outlay of a few £thousand.

[wherebee]

8 minutes ago, Noallegiance said:

So difficult not to think in these terms.

If a couple of the silver miners I'm in do only half of what they did in 2010 I'd consider ceasing work. The numbers if they did the same or in excess of the last silver run are simply mind-boggling, considering the outlay of a few £thousand.

I don't mean to rent out, I mean to create a place my kids can live in without having to pay insane rent.  Non taxable benefit if done right.

[DurhamBorn]

11 minutes ago, Cattle Prod said:

Later is not an option without supporting infrastructure. Every region has a MEFS (miniumum economic field size). The UK's MEFS was quite small close to infrastructure, now it's blown out because of the taxation and uncertainty. And if you have to put in new infrastructure, you need a big one, which is no longer there.

Coal I don't know much about but I suspect it's much cheaper (seams close to the surface, on shore) than offshore oil and gas developments. The MEFS for a coal mine in @DurhamBorns garden is the price of a pickaxe.

Yes,im on the very edge of the coal field,it ends about another 4 miles south and 3 miles west from my house.The western edge at a place called Cockfield Fell you could find coal on the surface.There are stone age pits there where they were digging it out.It slowly deepens towards the coast and under the sea.The pits were drift mines here,you just walked down a slow incline and multiple small seams,but they got bigger as you got deeper.Lots of fields around here still have small brick sheds farmers let their beast shelter in that were for the fans.My home town is riddled with "black paths" that used to be railways,some horse drawn at first then of course we invented steam railways in my home town.They ran through back gardens,over paths,everywhere.I can just remember as a kid the trains still crossing the paths and stopping for them,mostly shunting then though.There are a few places you can crawl in old drifts and we did as kids and go a long way down and to the coal seams.Ones they left as too thin to bother with.We had an old structure called "the coal drops",overgrown in trees,but was where the coal wagons from the drifts all dropped the coal down a shoot and into the train to take to Stockton,then onto London powering the industrial revolution.My grandad used to say Englands might started at The Masons Arms (that was the pub the first ever passenger train left) and ended half a mile away at The Essoldo (the cinema they closed in 1969) where they ripped the lines up when they closed the wagon works.

Local story on The Essoldo was that you could snog your girl at the back and never be challenged by the staff.The reason?.A bloke came back from the Korean war and was snogging his sweetheart.The usher shone a torch on him and told him to get out.The bloke picked him up by his ankle and dangled him over the top holding him with one arm upside down."iv been fighting in hell for people like you are you saying i cant kiss my girl".After that it never happened again and the local lads used to say "im off tonight for an Ernie Bland" ,that was the guys name,and meant the back row of The Essoldo for some heavy petting.

England could do with a million Ernie Blands today.

[Axeman123]

30 minutes ago, Noallegiance said:

If a couple of the silver miners I'm in do only half of what they did in 2010 I'd consider ceasing work. The numbers if they did the same or in excess of the last silver run are simply mind-boggling, considering the outlay of a few £thousand.

Could you tell me more please? Names etc.

I have only been looking at gold/GDXJ so far, but AIUI silver and the miners of it are way more volatile.

[Lightscribe]

38 minutes ago, DurhamBorn said:

Yes,im on the very edge of the coal field,it ends about another 4 miles south and 3 miles west from my house.The western edge at a place called Cockfield Fell you could find coal on the surface.There are stone age pits there where they were digging it out.It slowly deepens towards the coast and under the sea.The pits were drift mines here,you just walked down a slow incline and multiple small seams,but they got bigger as you got deeper.Lots of fields around here still have small brick sheds farmers let their beast shelter in that were for the fans.My home town is riddled with "black paths" that used to be railways,some horse drawn at first then of course we invented steam railways in my home town.They ran through back gardens,over paths,everywhere.I can just remember as a kid the trains still crossing the paths and stopping for them,mostly shunting then though.There are a few places you can crawl in old drifts and we did as kids and go a long way down and to the coal seams.Ones they left as too thin to bother with.We had an old structure called "the coal drops",overgrown in trees,but was where the coal wagons from the drifts all dropped the coal down a shoot and into the train to take to Stockton,then onto London powering the industrial revolution.My grandad used to say Englands might started at The Masons Arms (that was the pub the first ever passenger train left) and ended half a mile away at The Essoldo (the cinema they closed in 1969) where they ripped the lines up when they closed the wagon works.

Local story on The Essoldo was that you could snog your girl at the back and never be challenged by the staff.The reason?.A bloke came back from the Korean war and was snogging his sweetheart.The usher shone a torch on him and told him to get out.The bloke picked him up by his ankle and dangled him over the top holding him with one arm upside down."iv been fighting in hell for people like you are you saying i cant kiss my girl".After that it never happened again and the local lads used to say "im off tonight for an Ernie Bland" ,that was the guys name,and meant the back row of The Essoldo for some heavy petting.

England could do with a million Ernie Blands today.

Was up towards your way the other week

[Noallegiance]

24 minutes ago, Axeman123 said:

Could you tell me more please? Names etc.

I have only been looking at gold/GDXJ so far, but AIUI silver and the miners of it are way more volatile.

Yes they're choppy as fuck and it will take continuous daily monitoring and a ton of discipline to manage.

I'm in Silver Elephant, Apollo, Abra &  Hochschild plus GDX & J and GDGB & J (since they stopped me being able to buy the US version).

[JMD]

2 hours ago, Harley said:

You've been reading Rousseau, Locke, et al (property rights, social contract, etc) and I claim my £5!

I said what must have been a few years ago now how relevant I was finding that stuff (along with the musings of Adam Smith et al) as once basic tenets get overtly compromised.

Such musings had long been with us but the tectonic shifts arising from the Industrial Revolution gave a particular focus to a stream of discourse in a search to contextualise and digest the new realities.

Are we back here again?  Does anyone see the overiding context explaining today and the painful consequences of refreshing the human equlibrium?

PS:  Hat tip to those setting up the goal and to @Pip321 for putting it in the back of the net!

Interesting subject. I'd attempt to answer your question by saying that the overriding context for me would be (human scale) 'bottom up' vs (structural/overtly rationalised) 'top down' thinking. The best example for us in the West (am not intending to be parochial here, and som globally I'm sure other equally powerful historical/cultural examples can be found for other regions) would be the difference between British common law and European Roman law.

The rights of individuals and groups under common law are derived by consensus and custom, and astoundingly these rights were pretty much settled by the 12th century. Whereas in Roman law, rights are argued for, conferred upon, frequently compromised, and sometimes even withdrawn(!), depending on the vaguaries of current political thought.

The US constitution borrowed from different parts of European thought and practice but got it's 'inalienable rights' bit from Britain. However things can change and I'm reminded that 15 or so years ago some of the legal elites in this country were pushing for Britain to adopt European Roman law. 

You mention the industrial revolution - and I'd perhaps add the rennaisance which itself introduced many new interesting and valuable, but frequently contradictory, practices and philosophies - are for me examples of where the basic tenets did become compromised. Am not saying all those new ideas were bad, for example Adam Smith and his formulation of free markets recognised the real risk that capitalism beyond small/local size might produce business cartels and could compromise freedoms. Actually I think that is an example of a bottom-up thinking, but whereas the French Revolution is characterised by an out of control top-down liberal philosophy, which ultimately unleashed many ill defined and destructive concepts, such as equality and fairness.

 

Edited April 8 by JMD

[JMD]

1 hour ago, Cattle Prod said:

Exactly right. Especially when if you leave the tap off it quickly corrodes, risking an environmental hazard, which means you have to rip the tap out and fill the pipe with cement. 

I've heard that BP sometimes use tennis balls?!

[RupertT]

15 hours ago, Pip321 said:

Inside Job is one of the better ones.

If I recall correctly it draws you in at the beginning with Iceland utopia and then turns it into shit. leverage and other peoples money. 

Along the lines that you give your money to a corner shop bank (remember your money) and a billionaire buys a yacht for £50m….but he doesn’t. He uses his company which uses the bank who uses your money to lend to this guy to buy a yacht.  

I remember watch another film Greed (not nearly a documentary) where it became clear how finance can work. I want to buy M&S for £5bn, so I finance it using the money which is lent by a bank to M&S itself (because I am going to own it) so effectively I pay nothing my new business does…M&S owe the money the bank gets paid.

M&S is just my hypothetical brand example. 

What a set up…the asset you buy effectively borrows the money and of course the old directors are happy because the get £100m or so for the deal  

Effectively the 65,000 or so staff then work for me, I cream a little off the top each month and bingo everyone wins. Except M&S ‘the business’ which is now asset neutral and if it goes wrong for a few months will collapse.

Finance and banks are a wonderful thing….that’s why they hate gold 😉

If I remember correctly that is technically illegal for UK public companies under the financial assistance provisions of the Companies Act (used to be s151, but I lost track of the section numbers after the 2006 Act came out )

[DurhamBorn]

5 minutes ago, Jesus Wept said:

 

A lot of retail will go the main etf on LSE to spread risk SILG (Global X silver miners etf).

Here is its top 10 holdings.

 

For a larger more established 4-5 bagger go for Sibanye

Id advise Sibanye as well,its not as exciting of course,but very well ran and should last long enough for the real bull to kick in.

I have also been buying a tiny gold miner with a a 300 million oz silver prospect at cost of $2.25oz AISC with credits,fully permitted.Now these tend to end up mostly owned by the streamers and little to nothing for shareholders as they borrow with convertibles to build out,or they never get the mine built and end up selling it for next to nothing BUT if silver can keep running and IF they dont scrap the prospect etc then it could be a 5x,10x,20x stock.I will likely put it on the thread later,but i dont like putting these one because the risk is off the scale,a very very good chance it goes to zero and a very good chance people lose money on it.

[Lightscribe]

1 hour ago, Axeman123 said:

Could you tell me more please? Names etc.

I have only been looking at gold/GDXJ so far, but AIUI silver and the miners of it are way more volatile.

Impact and Abra are my two juniors of choice. Bear in mind however with any pullbacks they will be very volatile, they’ve already run up initially.

[Castlevania]

8 minutes ago, Jesus Wept said:

To be fair you mentioned 2 junior silver miners a month ago that you had just bought after selling some ftse 100 divi share  (I forget the names) and you said they were high risk and “widow makers”….🤣

Wish you’d said they’d do 50-60% in the next month ! 
 

What were they? I’ll dig out the post. 

 

Endeavour Silver as an absolute shitco is up 100% since t’s February lows.

[DurhamBorn]

12 minutes ago, Jesus Wept said:

To be fair you mentioned 2 junior silver miners a month ago that you had just bought after selling some ftse 100 divi share  (I forget the names) and you said they were high risk and “widow makers”….🤣

Wish you’d said they’d do 50-60% in the next month ! 
 

What were they? I’ll dig out the post. 

 

Endeavour,Mag Silver and Tower Hill mines.They are blue chips compared to what iv been buying the last week 

[spygirl]

Well, doh .....

JPMorgan Chase chief executive Jamie Dimon has warned that US inflation and interest rates could remain higher than markets expect because of high government spending.

Ditto UK.

Raising IR to take money out of the economy ,mainly via mortgage cost, is dead.

If CBs want to take money out ofthe economy then they need to slash benefits spend.

 

[SpectrumFX]

2 minutes ago, spygirl said:

Well, doh .....

JPMorgan Chase chief executive Jamie Dimon has warned that US inflation and interest rates could remain higher than markets expect because of high government spending.

Ditto UK.

Raising IR to take money out of the economy ,mainly via mortgage cost, is dead.

If CBs want to take money out ofthe economy then they need to slash benefits spend.

 

In related news pensions are up 8.5% today.

I wonder how much of the benefits bill is pensions?

https://www.bbc.co.uk/news/business-53082530

The state pension cost £110.5bn in 2022-2023, just under half the total amount the government spends on benefits.

 

 

[Lightscribe]

21 minutes ago, Jesus Wept said:

Think I might have timed the bottom on this one to perfection.

Moved out of Rolls Royce and into silver and Sibanye a month ago. 

Who needs cost averaging and hold forever….? 

Sibanye up 32% since 5th March. 52 week low $3.86 - cheers @DurhamBorn

Sibanye has a bit of an ace up its sleeve with the gold oz it mines also as well as the uranium in the tailings that DB has referred to once they decide what they’re doing with it. 

Platinum could follow in the wake of the other PMs, but it is a smaller market so is more susceptible to Mr.Slammy.

Also Sibanye have already hedged 60% of their gold output below current spot apparently, not sure how accurate this is (comment posted below)

So it may take until later in the year or 2025 to see the shackles come off.

[DurhamBorn]

8 minutes ago, spygirl said:

Well, doh .....

JPMorgan Chase chief executive Jamie Dimon has warned that US inflation and interest rates could remain higher than markets expect because of high government spending.

Ditto UK.

Raising IR to take money out of the economy ,mainly via mortgage cost, is dead.

If CBs want to take money out ofthe economy then they need to slash benefits spend.

 

Thats right.The macro is they monetised 30% of saved labour ie gilt values in pensions to give to bennies.Around 15 years of someones lifetime savings were given to bennies to spend over the last few years.Thats where the inflation came from.Distribution cycle,like i warned all along and i dont think i ever heard that term mentioned for decades before i started to use it to explain things.We need to cut consumption by around 15% to 25% and/or rebuild primary production.By inflation protecting bennies and the retired public sector they moved all the consumption cut onto the working etc,so around 40% ling standard cut,BUT by then lots more will jump sides (pip and ESA everyone) so its more like 65% loss in living standards for the working compared to no loss for the none working.Insanity.

[Noallegiance]

37 minutes ago, Jesus Wept said:

Think I might have timed the bottom on this one to perfection.

Moved out of Rolls Royce and into silver and Sibanye a month ago. 

Who needs cost averaging and hold forever….? 

Sibanye up 32% since 5th March. 52 week low $3.86 - cheers @DurhamBorn

Oh yeah and these.