Credit deflation and the reflation cycle to come (part 9)

[Mandalorian]

13 minutes ago, Axeman123 said:

Its a wild prediction I will grant you; but when you look how rapidly a complete stuffed shirt like Kier Starmer swung behind "adult human female" as a definition of woman,

 

Has he though?  Really?

He burbles on - like he does about everything - but will he stick to it after some backlash?  Doubt it?

[montecristo]

1 hour ago, Alex said:

This for me is the only reason for holding some crypto. Maybe you can't spend it during the crash but remembering 12 words (or whatever it is) feels a lot more like you own the wealth than electronic numbers, etc., and can use it on your own terms. My assumption is that all private wealth will be appropriated/confiscated eventually to prevent collapse, but collapse will still happen.

And to those who think it's "only" an economic crash coming which won't affect society too much, what do you think the economy actually is? I think posters talking about the 1970s have it about right.

I have memorised my seed words.  I can travel the world with 10+ years of living expenses in my brain.  I have no worry's about getting gold bars confiscated at the airport.  Everyone should have little bit.

[Errol]

1 minute ago, montecristo said:

I can travel the world

If the crash as you describe happens travel won't be allowed. They won't let people leave. 

[montecristo]

1 minute ago, Errol said:

If the crash as you describe happens travel won't be allowed. They won't let people leave. 

I already have left.

[Errol]

7 minutes ago, montecristo said:

I already have left.

That is the only solution. 

[Axeman123]

56 minutes ago, Mandalorian said:

Has he though?  Really?

He burbles on - like he does about everything - but will he stick to it after some backlash?  Doubt it?

My whole point is that hasn't anything ever in his life, and nor will heever stick to anything ever.

Further, I would point to the near total LACK of backlash he got as the real "dog that didn't bark" here. 9 times out of 10 the backlash is stage managed rather than organic IMO.

[DurhamBorn]

1 hour ago, Axeman123 said:

My whole point is that hasn't anything ever in his life, and nor will heever stick to anything ever.

Further, I would point to the near total LACK of backlash he got as the real "dog that didn't bark" here. 9 times out of 10 the backlash is stage managed rather than organic IMO.

Labour will be a disaster as we know.Listen to Putin answering those questions then look at the Labour front bench.They are my childrens enemy,not Putin.Just imagine that.

[Calcutta]

PMs go nuts on a Friday and the Israelis kick off over the weekend. Interesting....

[Harley]

6 hours ago, Castlevania said:

Government spending is largely offsetting the Fed’s tightening. Which I think is why inflation is sticky and the US economy hasn’t rolled over.

Agreed.  That and John Williams running the current numbers with more historically consistent calculations to give what I have always maintained.......  TLDL: Inflation seriously understated with knock on effects on GDP, etc.  US employment data not fit for purpose.  Etc.  Similar here?  When I first started, they told us only the French cooked the numbers! 

 

[Harley]

5 hours ago, reformed nice guy said:

 

I think the dosbods hive mind managed to call and benefit from the 2020 COVID collapse.

If you bought just the oilies at that time then at least that section of your portfolio is outperforming the popular Vanguard 60% 40% bond fund, the Vanguard whole world, the NEST pensions that millions of private sector workers are in and a lot of the other big pension funds. They are still nursing their massive bond losses.

More recently, the outsize gold and silver holding that dosbodders tend to have is treating us well.

Dosbods have given us an edge which is a very rare thing in the competitive world of stock market trading

Pareto:  80% of lurking here is not suckling on the mainstream (e.g. those 60:40s, bond losses, etc).  Then the last 20% for what you otherwise do (what and who you listen to here).  Our objectives restricted how hard we played the 2020 upside but we definitely avoided those losses - that's numero uno for us atm.  But we don't sit equally between Mr 60:40 and Mr DB, we are heavily (but not completely) skewed towards Mr DB.  Just where we want to be!

Edited May 19 by Harley

[Harley]

4 hours ago, M S E Refugee said:

Bullionvault also have a depository in Singapore,is there any advantage of using Bullionstar over Bullionvault in Singapore?

I listened to a PM dealer saying (on Palisades Radio?) how they were divesting client holdings from Singapore given what happened (over Covid?).  I have no idea what his concern was as there was no follow up question.   

[Harley]

6 hours ago, DurhamBorn said:

I have huge respect for David Hunter and think he is a superb macro strategist,but im not sold on his everything goes down 80% apart from treasuries.I find myself leaning more with Lynn's thoughts that we see sector by sector,area by area pullbacks.My mentor told me how to value stocks a long time ago,nothings changed or will change.The fact is companies stop growing at some point then maybe capture 1/2 to all inflation only.At that point fair value is PE of 10,divi of 6.5% to 7% ,3% for de-leverage,share buy backs,or small bolt on aquisitions.ALL companies get to that point OR they dissapear,bought out or bust.So those buying the bubble stocks now,say Nvidia are saying they think their profits till reach $230 billion.

Now almost everyone on Twitter etc knows everyone is trying to come off the dollar.HOWEVER,thats not true.They are trying to come of holding their dollars in treasuries.For now they will all still use dollars BUT they are buying things they can EXCHANGE for dollars later that CANNOT by monetised away by the Fed and US treasury.So the nuance is they are buying things priced in dollars instead of dollars themselves.WHY?/,well because they can be swapped for dollars when needed,WITHOUT loss of value,OR swapped for other things IF the dollar system collapses.That is why the PMs are going up,but also so will other areas,for instance assets in markets with positive food and commod production.

In other areas,like here in the UK,if you are going to hold some home bases assets,and you should,even in a falling living standards country it MUST be companies that can inflation increase prices,but with STABLE or falling CAPEX and depreciation.Thats why we made so much last week on BT,the shorts losts so much.Those huge institutions dont get the above point.What will people give up with 5% pa price increases and what will they try to keep.

I treaded water for 18 months after an explosive two years,but the last few months has seen very big gains across most areas,and decent gains in other.Almost everything i own has started to turn.There is a huge amount of cross market work to do for the rest of this cycle,and its not going to be easy,BUT i think the thread is very well positioned.Even if the likes of Nvidia do one day reach $300 billion free cash flow,that would mean they would end up level where they are today,so still a terrible investment.

So i think the cycle plays out,sharing off assets,pooling of assets,falling demand big ticket (with a lag boomers and retired public sector buying like drunks) dollars being exchanged for real assets NOT to come off the dollar,but to sell for dollars that have not been monetised later,OR something else if needed.Big EMs will continue to sell dollars to buy commods,but also producing mines,farms etc etc

What should be pretty obvious  is yes you can have a reserve currency,but PMs are still the real deal.

You and I maybe now have a fundamentally different approach.  I leant towards yours in the "smooth and easy" past but that Lynn point to me is key.  Valuations, etc take time to play out and have little impact on day to day prices.  Problem is, stuff like what Lynn says are likely to screw up that play out.  I believe you have to become more tactical and, given the volatility/instability, price is your main guide.  So trend following is key.

Naturally, not all eggs in one basket for several reasons (e.g. the various risks) so a spread such as balanced portfolios, value portfolios, and hard asset portfolios.  But you have to be tactical in a significant way.  There is simply too much instability and too many narratives to make too many assumptions with sufficient confidence. 

And I say this as someone who is very well placed to work company financials, etc in detail.  I have to play to what I see in front of me rather than my particular skills.  It sounds like you do too to some extent.  You may mine a particular set of macro inspired seams but you work them, in and out, as they fluctuate.  Me too, except I use technicals to identify those seams and am very comfortable, indeed primed, for a world like Lynn suggests.

You mentioned once how David Hunter would advise the traders.  They held his comments in mind for context but worked what was on the screens in front of them.  These are the two extremes.  In more benign times you could lean more towards the Davids, but now I feel I need to be more closer to the screens.  I listen and take note but appreciate it will increasingly take a fair wind to deliver.  As with options, we now need to get the direction AND timing right even in non-option trades. 

Essentially just expected value:  probability (risk) times value of the outcome.  Risk has increased (probability fallen) and so has the expected value fallen.  Risk has increased in both number and severity.  Tactical plays, although more work, may better reduce the risks by reducing the network. 

I'm currently as less keen on investing for the strategic long term as a CEO would be in investing in the North Sea.  That is apart from hards assets! 

Edited May 19 by Harley

[Harley]

6 hours ago, Mandalorian said:

Not a chance in hell.

The SW1 bubble dwellers would eat their right testicle before they said anything like that.

They will be the ones wearing the equivalent fur coats as we all pick amongst the equivalent WW2 ruins.

Edited May 19 by Harley

[sancho panza]

23 hours ago, Loki said:

How do people genuinely see a Dave Hunter style bust playing out over here, forget the money for a bit I'm talking societal, real life day-to-day stuff.  I know there's a few light-hearted common themes we mention but the recent action has conversely brought the possible bust into focus for me

DH has taken some heat,but the one comment of his that will stay with me a long time is when he said he's glad he'll be dead by the 2040's when things gets dark.

There's two sides to Hunter.One is his macro work and the second is where those macro paths will lead.

For the UK I think we'll see declining real incomes for 20 years then a civil war/seismic social dislocation of some sort,most likely based on religion,possibly ethnically based as well.

It's not something I want to see at all,but that's the path we're on.History is full of such examples.

9 hours ago, DurhamBorn said:

I have huge respect for David Hunter and think he is a superb macro strategist,but im not sold on his everything goes down 80% apart from treasuries.I find myself leaning more with Lynn's thoughts that we see sector by sector,area by area pullbacks.My mentor told me how to value stocks a long time ago,nothings changed or will change.

Now almost everyone on Twitter etc knows everyone is trying to come off the dollar.HOWEVER,thats not true.They are trying to come of holding their dollars in treasuries.For now they will all still use dollars BUT they are buying things they can EXCHANGE for dollars later that CANNOT by monetised away by the Fed and US treasury.

I treaded water for 18 months after an explosive two years,but the last few months has seen very big gains across most areas,and decent gains in other.Almost everything i own has started to turn.

I think DH is too rigid in thinking where the 80% off will occur

I think we will see is a huge drop in living stanrdards in the West-poss 80% for the average joe but likely less maybe 50%- the question of how we get there is where I'd differ with DH.We could see asset prices fall but prices rise,we could see asset prices fall disastrously,prices falling but a lot less.We could see jobs hold up but sterling crumble etc etc.There are jyriad ways to skin the middle class but skinned we will get.

Im defo with DH that things are going to get grim.

 

ref the second bit in bold that's an astute observation imho and one I'll take on board.I have been tlaking(to myself) like dedollarization necessarily means the end of the $ but it doesn't as you point out.

 

[Lightscribe]

All I know is I’m riding PMs up until just before $50 silver then I’m selling half as was always my intention.

Forget $200 and $300 targets etc. What kind of world would we be in industry wise with the likes of production with PGMs and silver (more importantly copper) following at those levels in the face recessionary demand forces and job losses.

That shitshow is for physical not for the likes of miners in ISAs/SIPPs.

Looking at the charts in relation to DXY dropping from here, $35 could be next in line but Asia spot is the lead to watch if it continues to rise. In the west it requires much more fear in the markets, which isn’t anywhere there *yet*.

$50 will be a major resistance (shouldn’t be because inflation adjusted is ridiculously higher) but without the fear it’s what the market ‘expects’ from here past $30.

Edited May 19 by Lightscribe

[sancho panza]

 

7 hours ago, DurhamBorn said:

Labour will be a disaster as we know.Listen to Putin answering those questions then look at the Labour front bench.They are my childrens enemy,not Putin.Just imagine that.

worked last night.Was on with a young 22 year old ambulance technician who's paying £500pcm (bills in)to live in an HMO that has  a slug infestation and mould in his room.

Nice lad,learning away.I'm careful what I say at work but I been in a couple of tight situations with this lad and he's a solid guy.I was asking him about what his generation think of bennies and how they're getting shafted by student debt,living costs,taxes etc.He basicaly said msot don't know but he's learning.

ANyway,cut to 0300 and we're traipsing around the city looking for a 'frequent flier' alcoholic with chest pain/suicidal thoughts(normal rotuine is to get assessed then decline transport to A&E) prob costing taxpyers circa £300/£400 in wasted time.

FInally he pitches up out of the dark,pit bull in tow.We go to flat,go to ambo,assess and get chatting.

The guy starts talking bennies so I ask him what he's on.Guys says £300 Universal credit every week,then he gets £500pcm in PIP for his bad backevery four weeks .He pays £73 per week for his flat from that.

SO my mate is blown away by the figures,he does the calcs,and then says

'so you're bascially getting £1700pcm in benefits?' guy smiles and goes 'yep' and takes  aswig of hsi Knight cider can 8.4%

My mate is spewing.

'that what I earn in a month and I pay £350 in tax and NI'...................

I was laughing,the alcie was laughing,swigging his cider.

 

you couldn't make it up.maybe the alcie was winding him up.

afterwards the lad got proper reflective and a bit down.his life is sh1t and hard work,he goes home to his slugs and naother night shift tongith and the alcie goes home to his lie in in his one bedder courtesy of the taxpayer.

we're gonna lose a generation when they wake up

 

edit to add-the best bit was the alcie was moaning because his girlfriend had nicked his phoine and had buggered off with it.shes a crackhead he was telling us and he was fuming,going to get a couple of people to mug her when she picks up her cash before she blows it on crack.

apparently,it's a common tactic in that world to mug each otehr when they land cash,methadone or crack(he said that not me)

honestly,it's a differnt world to the one the polos live in

Edited May 19 by sancho panza

[Lightscribe]

10 minutes ago, sancho panza said:

 

worked last night.Was on with a young 22 year old ambulance technician who's paying £500pcm (bills in)to live in an HMO that has  a slug infestation and mould in his room.

Nice lad,learning away.I'm careful what I say at work but I been in a couple of tight situations with this lad and he's a solid guy.I was asking him about what his generation think of bennies and how they're getting shafted by student debt,living costs,taxes etc.He basicaly said msot don't know but he's learning.

ANyway,cut to 0300 and we're traipsing around the city looking for a 'frequent flier' alcoholic with chest pain/suicidal thoughts(normal rotuine is to get assessed then decline transport to A&E) prob costing taxpyers circa £300/£400 in wasted time.

FInally he pitches up out of the dark,pit bull in tow.We go to flat,go to ambo,assess and get chatting.

The guy starts talking bennies so I ask him what he's on.Guys says £300 Universal credit every week,then he gets £500pcm in PIP for his bad backevery four weeks .He pays £73 per week for his flat from that.

SO my mate is blown away by the figures,he does the calcs,and then says

'so you're bascially getting £1700pcm in benefits?' guy smiles and goes 'yep' and takes  aswig of hsi Knight cider can 8.4%

My mate is spewing.

'that what I earn in a month and I pay £350 in tax and NI'...................

I was laughing,the alcie was laughing,swigging his cider.

 

you couldn't make it up.maybe the alcie was winding him up.

afterwards the lad got proper reflective and a bit down.his life is sh1t and hard work,he goes home to his slugs and naother night shift tongith and the alcie goes home to his lie in in his one bedder courtesy of the taxpayer.

we're gonna lose a generation when they wake up

 

edit to add-the best bit was the alcie was moaning because his girlfriend had nicked his phoine and had buggered off with it.shes a crackhead he was telling us and he was fuming,going to get a couple of people to mug her when she picks up her cash before she blows it on crack.

apparently,it's a common tactic in that world to mug each otehr when they land cash,methadone or crack(he said that not me)

honestly,it's a differnt world to the one the polos live in

Exactly that, and I know police get a bashing here but imagine young police officers earning similar crap wages and having to roll around on the floor with exactly the same ilk as well as in domestics. It’s a thankless task.

Why not work as a manager in Lidl/Aldi for more money for less grief? 

That never gets a mention in the media on a near daily occurrence, druggies biting and spitting blood in their faces etc.

These aren’t retired officers of old enjoying the benefits of carving themselves a niche role away from the coal face, putting up with the shit until doing their time and retiring and getting an inflation linked pension (that carrot has long gone). 

You can start to understand where the structural integrity fails of the county. The emergency services will be the first to crack and we are already seeing that.

[Long time lurking]

As the saying goes there is no cloud it`s just someone else's computer 

Who the fuck backs up their data on the same service is beyond me , i know fuck all about tech surely this is just basic logic 

[Harley]

1 hour ago, sancho panza said:

 

worked last night.Was on with a young 22 year old ambulance technician who's paying £500pcm (bills in)to live in an HMO that has  a slug infestation and mould in his room.

Nice lad,learning away.I'm careful what I say at work but I been in a couple of tight situations with this lad and he's a solid guy.I was asking him about what his generation think of bennies and how they're getting shafted by student debt,living costs,taxes etc.He basicaly said msot don't know but he's learning.

ANyway,cut to 0300 and we're traipsing around the city looking for a 'frequent flier' alcoholic with chest pain/suicidal thoughts(normal rotuine is to get assessed then decline transport to A&E) prob costing taxpyers circa £300/£400 in wasted time.

FInally he pitches up out of the dark,pit bull in tow.We go to flat,go to ambo,assess and get chatting.

The guy starts talking bennies so I ask him what he's on.Guys says £300 Universal credit every week,then he gets £500pcm in PIP for his bad backevery four weeks .He pays £73 per week for his flat from that.

SO my mate is blown away by the figures,he does the calcs,and then says

'so you're bascially getting £1700pcm in benefits?' guy smiles and goes 'yep' and takes  aswig of hsi Knight cider can 8.4%

My mate is spewing.

'that what I earn in a month and I pay £350 in tax and NI'...................

I was laughing,the alcie was laughing,swigging his cider.

 

you couldn't make it up.maybe the alcie was winding him up.

afterwards the lad got proper reflective and a bit down.his life is sh1t and hard work,he goes home to his slugs and naother night shift tongith and the alcie goes home to his lie in in his one bedder courtesy of the taxpayer.

we're gonna lose a generation when they wake up

 

edit to add-the best bit was the alcie was moaning because his girlfriend had nicked his phoine and had buggered off with it.shes a crackhead he was telling us and he was fuming,going to get a couple of people to mug her when she picks up her cash before she blows it on crack.

apparently,it's a common tactic in that world to mug each otehr when they land cash,methadone or crack(he said that not me)

honestly,it's a differnt world to the one the polos live in

Good but........please write it again.  You forgot the boomers, each and every one of them.  Otherwise people will start looking where they're not meant to.

[sancho panza]

30 minutes ago, Lightscribe said:

Exactly that, and I know police get a bashing here but imagine young police officers earning similar crap wages and having to roll around on the floor with exactly the same ilk as well as in domestics. It’s a thankless task.

Why not work as a manager in Lidl/Aldi for more money for less grief? 

That never gets a mention in the media on a near daily occurrence, druggies biting and spitting blood in their faces etc.

You can start to understand where the structural integrity fails of the county. The emergency services will be the first to crack and we are already seeing that.

@ThoughtCriminal has already said as much about the prison service as well.

young starting coppers on £28k(it was less I believe) but in all honesty it's not a job Id do for that moeny.only got to go wrong once.

I see young  female coppers hthrough work adn I wouldnt fancy their chances much if they had to scrap one on one with soem of the scumbags that are outthere.

big thing going on with ambo is that the reserves of expernerince  are getting thinner and thinner.loads leaving,using your aldi line of reasoning.with each stressfulsituation,you fall back on the experince of the crews involved(ike the police) and increasingly,there;s less there.as theres less there,.....thre's less there.......

seeing it in the armed forces as well.

[sancho panza]

aussie pms getting bid heavily,either playing catch up or seeting new trned @wherebee

worth noting Silver $32 handle and gold at $2437

Edited May 20 by sancho panza

[Bien Pensant]

On 18/05/2024 at 23:12, Loki said:

How do people genuinely see a Dave Hunter style bust playing out over here, forget the money for a bit I'm talking societal, real life day-to-day stuff.  I know there's a few light-hearted common themes we mention but the recent action has conversely brought the possible bust into focus for me

This was the question I actually had in mind when I started that self-sufficiency thread - Should one start cashing in one's assets that are in the form of other people's promises and, instead, start investing in fixed assets that will directly produce the things one needs on an everyday basis?

However, I didn't express it very well so it just ended up with people, quite rightly, pointing out that actual self-sufficiency is impossible, at least in the UK.

When thinking about how a collapse is likely to play out I always refer back to the fall of the USSR, our own experiences with fuel shortages and the start of 'Covid'.

There'll probably be shortages of everything but I think the first necessities to become flaky, whether due to genuine supply chain collapse or panic buying, will be:

• Toilet paper (because that's the first thing people hoard for some reason)
• Petrol (because that's the second thing people hoard - as a basic precaution, I haven't let the car's tank go below three-quarters full since the Gaza thing started up)
• Meat (which, having a short shelf-life but complex supply chain, was one of the first things to be disrupted by 'Covid')
• Basic pharmaceuticals/vitamin tablets (which practically all come from China)
• Spare parts (ditto)
• Clothes
• Electricity, Gas, Running water and Telecommunications

So I guess the first investments one should make are: solar panels, a lathe, a sewing machine, a chicken coup, a bicycle and a bidet.

[Bien Pensant]

17 hours ago, feed said:

Just like the other events we get massive state intervention, creating the next wave of inflation and pushing us further along the path of fiscal dominance and into financial repression.

I don't watch this Hunter bloke's stuff so I don't actually know what he's predicting.

However, state collapse has been baked in since 2008, its just a question of when.

That's really a question of when they will no longer be able to keep getting stuff in return for debt and that's really a question about the stability of US hegemony.

It's become pretty clear in years past that the US is no longer the world hegemon and that we're simply waiting for the next title bout to confirm it, just as the UK was clearly no longer the hegemon in 1939 and its currency ceased to be the global reserve once the rankings came in.

Frankly, I reckon that China has decided to carry the US for a few rounds while it gets its own shit together but the US's foes are now openly defying it and it surely can't slink from many more fights before its friends desert it too.

Edited May 20 by Bien Pensant

[wherebee]

48 minutes ago, sancho panza said:

aussie pms getting bid heavily,either playing catch up or seeting new trned @wherebee

worth noting Silver $32 handle and gold at $2437

one of the small ones I am holding just went up 25% in.... one day.  That's mental.

It's a hole in the ground with a liar on top though...

[M S E Refugee]

The current Western Silver price is $32.31 and the Shanghai am fix was $35.46.

The Chinese are turning the screw on the Western PM markets.

Edited May 20 by M S E Refugee