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

[Funn3r]

We interrupt this broadcast for the following newsflash from the "High Inflation" thread. 

Well-respected non-nutter journalist with excellent sources says Israel tried nuclear attack on Iran and failed.

Well if true that should do something to the markets
 

 

[Axeman123]

5 minutes ago, Funn3r said:

Well-respected non-nutter journalist with excellent sources says Israel tried nuclear attack on Iran and failed.

Quite a few non-nutters seem to have jumped the shark in the last few years.

• Rudy Juliani and a landscaping company parking lot press conference.
• Sidney Powell and the Kraken.
• Seymour Hersch's various claims about NS2.

Its all very odd, I am pencilling Pepe Escobar in as another "LSD in the home tap water" victim. I don't beleive anything about the version he gave, and the details are so weird it is almost like a deliberate hypernormalisation thing.

[leonardratso]

pepe excrementobar, as recommended by george galloway.

Edited April 22 by leonardratso

[Funn3r]

1 minute ago, Axeman123 said:

Rudy Juliani and a landscaping company parking lot press conference.

I still wonder about that. It was the "Four Seasons Posh Hotel" v. "Four Seasons Landscaping" one. The landscaping being directly opposite a crematorium which had seen a lot of mysterious comings and goings around the 2020 election. 

[Plan-b]

22 minutes ago, Funn3r said:

We interrupt this broadcast for the following newsflash from the "High Inflation" thread. 

Well-respected non-nutter journalist with excellent sources says Israel tried nuclear attack on Iran and failed.

Well if true that should do something to the markets
 

 

Here's the tweet that started it all off..

 

Edited April 22 by Plan-b

[Loki]

[Axeman123]

6 minutes ago, Funn3r said:

I still wonder about that. It was the "Four Seasons Posh Hotel" v. "Four Seasons Landscaping" one. The landscaping being directly opposite a crematorium which had seen a lot of mysterious comings and goings around the 2020 election. 

Its either:

• Him in on humiliating himself to discredit his own case, perhaps under duress.
• Him having a psychotic break, or having been drugged to resemble one, and no-one around him stopping him making a spectacle of himself.
• Him trying to send bizarre coded messages as part of a big plan, which by now. apparently involves 4 years of an illigitimate president destroying the country.
• Him being an active participant in the psychological warfare from the start, intended to distract and demoralise the "stolen election" camp he only pretends to represent.

[Loki]

1 minute ago, Axeman123 said:

a big plan, which by now. apparently involves 4 years of an illigitimate president destroying the country.

It's means it's working.  Two more weeks

[Calcutta]

2 minutes ago, Axeman123 said:

Its either:

• Him in on humiliating himself to discredit his own case, perhaps under duress.
• Him having a psychotic break, or having been drugged to resemble one, and no-one around him stopping him making a spectacle of himself.
• Him trying to send bizarre coded messages as part of a big plan, which by now. apparently involves 4 years of an illigitimate president destroying the country.
• Him being an active participant in the psychological warfare from the start, intended to distract and demoralise the "stolen election" camp he only pretends to represent.

Doctors have been drugging people and telling them it's fixing them so they act out of pocket for a long, long time.

If you can't get them entangled in a sex case get them fucked off their tits.

In the 1930s Hitler was a coherent, cunning political operator, by the end of the war he was a ranting maniac. 

How many US school shooters are unmedicated?

Don't take the doctor's pills.

[Loki]

7 minutes ago, Calcutta said:

Doctors have been drugging people and telling them it's fixing them so they act out of pocket for a long, long time.

If you can't get them entangled in a sex case get them fucked off their tits.

In the 1930s Hitler was a coherent, cunning political operator, by the end of the war he was a ranting maniac. 

How many US school shooters are unmedicated?

Don't take the doctor's pills.

There are some interesting theories on the etymology of the word pharmacopeia 

 

(PARKLIFE)

[HousePriceMania]

The world's economic woes have been resolved by someone with a cunning plan....

 

 

Edited April 22 by HousePriceMania

[Bien Pensant]

3 hours ago, Loki said:

OMG, you're so wrong, didn't you even read the tweet?

It said that an Israeli F35 was sent to deliver a nuclear weapon to Iran in order to cause an EMP (which just proves that the F35 can, in fact, reach double its stated service ceiling, since the minimum altitude at which it is possible to create an EMP is 30 km) but it was shot down by the Russians, trust me bro according to "a very high level intel source".

Then, having decided to both finally end their nuclear ambiguity and risk breaking the nuclear taboo, the Israelis decided not to say anything about it because 'least said soonest mended' and all that.

Edited April 22 by Bien Pensant

[Bear Hug]

9 hours ago, Axeman123 said:

Its either:.

• Him being an active participant in the psychological warfare from the start, intended to distract and demoralise the "stolen election" camp he only pretends to represent.

He was the mayor of NY on 911. Must know it all, but doesn't mention it. An actor. It should have been obvious from the start. 

Edited April 23 by Bear Hug

[crashmonitor]

The flipside of a record close on the FTSE 100 is a 6 month low on the pound at 1 dollar 23. 

It seems odd to me that Bailey is telegraphing  his want to aggressively loosen Monetary policy whilst at the same time his commentary is trashing the pound. Surely a stable currency is essential to reducing rates, as a  falling pound is inflationary. 

I know Bailey is desperate to cut,  but heck he isn't playing it well.

Edited April 23 by crashmonitor

[Pip321]

32 minutes ago, crashmonitor said:

The flipside of a record close on the FTSE 100 is a 6 month low on the pound at 1 dollar 23. 

It seems odd to me that Bailey is telegraphing  his want to aggressively loosen Monetary policy whilst at the same time his commentary is trashing the pound. Surely a stable currency is essential to reducing rates, as a  falling pound is inflationary. 

I know Bailey is desperate to cut,  but heck he isn't playing it well.

It’s starting to feel like a game of football where we think the manager might know what they are doing but the opposition has hit the post 10 times in the first half. So it’s 0-0 and we are still wondering….maybe he does know.  

And now we are coming out in the second half and either the team has reshaped or they lose 6-0 at full time.

I guess what we suspect is the manager does know what they are doing but he (and all his mates) have done the unthinkable and have a bet on the other side winning🥷🏻

One thing I have learned though is never try convince the sheeple. They believe the FTSE is booming so we are all wrong and money printing works…..we need more printing. 🎉🍾🥳

Oh, and if rates do go up, inflation rises, gold goes up and away and currency collapses at the end of the year (timescales say for example) that won’t be because you were right it will be ‘something else happened that no one could have predicted’

In the real world just quietly collect the money and nod.😉

[Axeman123]

40 minutes ago, crashmonitor said:

The flipside of a record close on the FTSE 100 is a 6 month low on the pound at 1 dollar 23. 

It seems odd to me that Bailey is telegraphing  his want to aggressively loosen Monetary policy whilst at the same time his commentary is trashing the pound. Surely a stable currency is essential to reducing rates, as a  falling pound is inflationary. 

I know Bailey is desperate to cut, anybody would think his favourite niece is in mortgage bother; but heck he isn't playing it well.

When the US cuts and the dollar weakens I assume the pound will strengthen. He is probably counting on that, and as you say he is desperate to cut. With job losses starting and so on I imagine the economic data he has access to is getting apocalyptic.

[MithrilVest]

12 hours ago, HousePriceMania said:

 

 

Correct me if I am wrong, a weaker pound will lead to inflation and higher IRs surely ?

 

It's more complicated than what I'm about to write, but there is a school of thought that says:

A weaker pound leads to an export led recovery and increased domestic production, this is, broadly, seen as good for the UK PLC and by extension the UK Stock Market.

This is because:

• A weaker pound means the goods and services we produce are cheaper for foreign buyers, this should lead to more sales boosting domestic production
• A weaker pound means importing goods and services are more expensive, this should again lead to increased domestic production as it's more cost effective

There are, of course, pros and cons to both a strong and a weak pound.

All things being equal a weak pound would probably lead to increasing interest rates, but it depends on what our masters objectives are (if they even know that themselves!).

[headrow]

30 minutes ago, Axeman123 said:

When the US cuts and the dollar weakens I assume the pound will strengthen. He is probably counting on that, and as you say he is desperate to cut. With job losses starting and so on I imagine the economic data he has access to is getting apocalyptic.

The banks are increasing their mortgage rates each month though , think Barclays have put another 0.3% on this week , so by the time they do have a cut things will be pretty much where they are now anyway.

[Democorruptcy]

33 minutes ago, MithrilVest said:

It's more complicated than what I'm about to write, but there is a school of thought that says:

A weaker pound leads to an export led recovery and increased domestic production, this is, broadly, seen as good for the UK PLC and by extension the UK Stock Market.

This is because:

• A weaker pound means the goods and services we produce are cheaper for foreign buyers, this should lead to more sales boosting domestic production
• A weaker pound means importing goods and services are more expensive, this should again lead to increased domestic production as it's more cost effective

There are, of course, pros and cons to both a strong and a weak pound.

All things being equal a weak pound would probably lead to increasing interest rates, but it depends on what our masters objectives are (if they even know that themselves!).

Bailey wants a weaker pound so our houses look cheaper to foreigners.

[HousePriceMania]

41 minutes ago, MithrilVest said:

It's more complicated than what I'm about to write, but there is a school of thought that says:

A weaker pound leads to an export led recovery and increased domestic production, this is, broadly, seen as good for the UK PLC and by extension the UK Stock Market.

This is because:

• A weaker pound means the goods and services we produce are cheaper for foreign buyers, this should lead to more sales boosting domestic production
• A weaker pound means importing goods and services are more expensive, this should again lead to increased domestic production as it's more cost effective

There are, of course, pros and cons to both a strong and a weak pound.

All things being equal a weak pound would probably lead to increasing interest rates, but it depends on what our masters objectives are (if they even know that themselves!).

I can see that.  Try telling that to someone who cant afford bread.

[DurhamBorn]

22 minutes ago, Axeman123 said:

When the US cuts and the dollar weakens I assume the pound will strengthen. He is probably counting on that, and as you say he is desperate to cut. With job losses starting and so on I imagine the economic data he has access to is getting apocalyptic.

Yes that will be their thinking,no concept that its bennies etc driving inflation here.The whole set up we have is inflationary when you understand the EMs want paying in none value losing money for their goods and savings.I doubt anyone in government or the BOE understands the reason we had long dis-inflation was because the EMs were willing to export to us and see their money lose its value by 2%ish a year.They knew,but accepted it because their elites liked visiting Wimbledon,Royal Ascot etc and it built up their industry etc.

Behind that 50% of the population slowly moved to bennies and public sector pensions.We simply imported to provide for them.An example i used back then was look on google maps at every council estate.The amount of huge trampolines ,millions of them,all imported from China,most bought by people on bennies creating nothing in return,just planting future inflation.

The real change in the cycle is that is ending.The EMs have huge savings rates and spare capital so their leaders are slowly creating their own club to trade in their own currencies.Its not war on the west etc.They will still sell to us.They just wont accept being robbed by 5%+ pa on deflating value currencies.

Here in the UK as i said was the outcome of the macro,more and more would choose not to work due to them having to pay more and more for the bennies now the EMs wont pay.Fat Shaz sent the bill to 4 or 5 Chinese workers,they forwarded it back to Paul who lives in the next street for her and works in the local warehouse.Pauls tax does not cover it though,so inflation takes the difference.

In this situation inflation is certain.However they should of used the signals to reform welfare hard,build up primary production including energy,nuclear etc,food but instead they doubled down on pumping welfare spending.

Its so high now everyone is jumping on sickness bennies.Young at home you can get a grand a month.Bennie mother can get £2k cash and her rent paid if she can get on it and her kid with made up ADHD or as they all say on Facebook "my child has complex needs".

Sunak knows,but im not sure he knows how bad the direction is.It would take 50% cuts in the mounts paid,or the best way win would be to include sickness bennies in the benefit cap and hold that for years and years.

 

[Axeman123]

1 minute ago, Democorruptcy said:

Bailey wants a weaker pound so our houses look cheaper to foreigners.

The changes to non-Doms etc must have killed that market off though. Even wealthy foreigners just wanting a pomme de-terre for luxury shopping trips will probably be put off by that, as it rules out ever moving here in retirement etc. The loss of FOM has made becoming a UK passport holder less attractive as well.

I also think the relatively stable currency used to make housing here attractive purely as an asset class denominated in it, as a wealthy Asian I wouldn't want an asset that could stay flat nominal in local currency and still kick me in the bollocks with a 20% depreciation against the dollar.

11 minutes ago, headrow said:

The banks are increasing their mortgage rates each month though , think Barclays have put another 0.3% on this week , so by the time they do have a cut things will be pretty much where they are now anyway.

Indeed. When rates are finally cut it will be an admission of economic weakness, and mortages will be unobtainium for most.

[Axeman123]

Just now, DurhamBorn said:

I doubt anyone in government or the BOE understands the reason we had long dis-inflation was because the EMs were willing to export to us and see their money lose its value by 2%ish a year.They knew,but accepted it because their elites liked visiting Wimbledon,Royal Ascot etc and it built up their industry etc.

I expect it was double digit % GDP growth that made the annual 2% errosion of reserves mathematically trivial. With the larger EMs like China accepting their economies won't continue to grow as fast in future as in the recent past the maths on that changes.

[sleepwello'nights]

51 minutes ago, MithrilVest said:

 

This is because:

• A weaker pound means the goods and services we produce are cheaper for foreign buyers, this should lead to more sales boosting domestic production
• A weaker pound means importing goods and services are more expensive, this should again lead to increased domestic production as it's more cost effective

 

Exactly. In Weimar Germany as hyper inflation started the economy boomed. German goods became very competitive in price as they exported more and more. 

Lessons were learnt !!!! 

Edited April 23 by sleepwello'nights

[Democorruptcy]

9 minutes ago, Axeman123 said:

The changes to non-Doms etc must have killed that market off though. Even wealthy foreigners just wanting a pomme de-terre for luxury shopping trips will probably be put off by that, as it rules out ever moving here in retirement etc. The loss of FOM has made becoming a UK passport holder less attractive as well.

I also think the relatively stable currency used to make housing here attractive purely as an asset class denominated in it, as a wealthy Asian I wouldn't want an asset that could stay flat nominal in local currency and still kick me in the bollocks with a 20% depreciation against the dollar.

FT did a piece suggesting the changes to non dom would raise an extra 2.7bn by 2028/29, I doubt that will kill it off, it's small change for the wealthy escaping shitholes to come to the marvellous UK. Spain is another place that's now pulling it's Golden Visa, so extra money about to tempt over here.