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

[Harley]

48 minutes ago, MithrilVest said:

there is a school of thought that says

That's more A level school.  The reality is more complicated (as you rightly say).  Those implications, if indeed even possible, take a long time to happen, well beyond the time horizons of those in "control" so are unlikely to materialise (we're still waiting following the already decade+ long devaluation).  What does happen in the main are financial flows and asset purchases rather than the flow of goods.

[Harley]

28 minutes ago, DurhamBorn said:

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.

 

Your best repetition of the theme yet!  Very well said.  One we should all learn by rote to quote.  Nowhere left to hide in that one!  And I'm not complaining.  It has to be said often to bring us back from our wanderings to ground zero, albeit sickening for those of us on the other side.

PS:  A new type of inflation for the text books:  "structural inflation" or "wage pennybenny pull inflation".

Edited April 23 by Harley

[Democorruptcy]

Traitorous IFS at it again. Last year they wanted a cap on ISA's now it's charging IHT on pension pots if people die before age 75.

Quote

 

The Government should stage an inheritance tax raid on unspent pension pots and close other loopholes, says leading think tank the Institute for Fiscal Studies 

Pension pots sit outside the inheritance tax net and pulling them into it could land the Government an extra £200million in revenue, its research claimed.

Currently, the outstanding defined contribution pensions of loved ones who die before they reach 75 can be passed on tax-free, while the unused retirement funds passed on by those who die after age 75 are subject to income tax on withdrawals.

But the IFS says the Government should end the pension perk and close other loopholes, imposing IHT on AIM shares and capping business and agricultural relief.

The amount of money subject to the inheritance tax pension pot exemption is set to continue growing, the Institute for Fiscal Studies warned. 

It said the Government would gain £400million in tax revenue by 2029 to 2030, if defined contribution pension pots were included in estates. And the IFS said that the Government could raise between £1billion and £2billion 'in the coming decades' if pension pots were made taxable.

https://www.thisismoney.co.uk/money/pensions/article-13328093/Stop-inheritance-tax-perk-pensions-loopholes-says-IFS.html?

 

 

[Axeman123]

15 minutes ago, Democorruptcy said:

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.

The reason it is predicted to raise so little is because so few will come or stay and hence pay it. Full UK taxes on worlwide income is not trivial for the weallthy, and neither is becoming Tax resident for a single year at which point even holidays make you at risk of becoming tax resident for a subsequent year if you don't count days like a hawk. Owning property here is even a strike against you for residency tests.

There are still plenty of tax incentives even in Europe, it is the real estate purchase to qualify that is largely being dropped as it pissed a lot of voters off by being priced out. AIUI Spain is only removing the property option from its golden visa, but still allows other ways to invest in the country in exchange for a residence permit. There is still nothing stopping people on that scheme buying homes, it just isn't required anymore. The big advantage over the UK is <183 days in country = no tax on worldwide income or even need to file a Spanish tax return. With full Schengen rights via the visa a main home in Spain and then half the year holidaying in Greece/Italy/France would appeal to many, and potentially enable zero tax living (eg by holding investments in Singapore).

Italy in contrast has a scheme that AIUI lets the same people pay a flat 100k euro annual tax bill regardless of income - even if that income is 100m meaning a 0.1% effective tax rate! While that 100k isn't nothing, it would enable unlimited days in one place.

[Axeman123]

6 minutes ago, Democorruptcy said:

Traitorous IFS at it again. Last year they wanted a cap on ISA's now it's charging IHT on pension pots if people die before age 75.

I am not for it per se, but there is some validity there. Pensions enjoy tax perks on the basis they are for retirement spending, and some people are "creatively" using them as an IHT vehicle. It also seem perverse to punish a family for someone dying before 75, since that is a tragedy in itself.

I would scrap all taxes etc, but if we are keeping them I don't find IHT on pension pots the greatest injustice tbh.

[Democorruptcy]

Stats on electric cars etc. the reduction in public transport is poor?

Quote

 

The number of electric buses in operation also grew, up by 159.4% to 1,922 units, making the UK Europe’s biggest market for zero emission buses and coaches. However, despite a record year of registrations in 2023, the UK’s public transport fleet has shrunk to its smallest level since records began at 71,239 vehicles. In further evidence of the need for greater investment in this sector, one in five buses in use is more than 18 years old.

https://media.smmt.co.uk/motorparc-2023/

 

 

[JREWING]

Skinny Shaz in Oz

She ain't happy but she'd put a smile on my face.

Getting bad all over now. 

A good point is it's getting getting so expensive to pay someone to build a house and the materials are blowing out in cost.

There is the clue. You'll own a trailer and be happy. Glad I'm an old cunt in his final quarter of life as this won't end well for the 99 percent.

 

Edited April 23 by JREWING

[Long time lurking]

17 hours ago, Errol said:

 

Rumors are Bliken is going to China with a ultimatum stop helping Russia or we will sanction any bank that processes payments from them 

[Heart's Ease]

49 minutes ago, Democorruptcy said:

Traitorous IFS at it again. Last year they wanted a cap on ISA's now it's charging IHT on pension pots if people die before age 75.

 

"....It said the Government would gain £400million in tax revenue by 2029 to 2030, if defined contribution pension pots were included in estates. And the IFS said that the Government could raise between £1billion and £2billion 'in the coming decades' if pension pots were made taxable."

Just noting that the 24/25 Are NHS budget is £179 billion.

This proposal will do nothing other than encourage more real wealth to be lost in boating accidents.

[M S E Refugee]

Just now, Long time lurking said:

Rumors are Bliken is going to China with a ultimatum stop helping Russia or we will sanction any bank that processes payments from them 

I'm convinced the Chinese have dirt on most of Biden's administration, Blinken ain't gonna do shit!

The Yanks look pathetic pleading with the Chinese every few weeks.

[Long time lurking]

16 hours ago, Axeman123 said:

AIUI undisputed fact that fentanyl and since the chinks cracked down slightly chemicals to readily synthesise it are freely sold online from China.

It`s down to the importing country to regulate their imports ,the USA`s opioid crisis manifested itself with Oxycontin ,Fentanyl took over when that was shut down ,almost all of which comes from Mexico

There can`t be a lot of heroin left on the market in Europe, since the Taliban have taken over Afghanistan have seen a 95% reduction in poppy production ,something will replace that   

[reformed nice guy]

https://www.bbc.co.uk/news/business-68874849

UK government borrowing higher than forecast

Despite the fiscal drag
Despite the massive population increase
Despite the increasing taxes
Despite extra north sea oil tax
Despite the currency devaluation

The short term gilts are about 5% so that will be a lot more interest due in the next 12months.

We are in a debt spiral

[Long time lurking]

17 minutes ago, M S E Refugee said:

I'm convinced the Chinese have dirt on most of Biden's administration, Blinken ain't gonna do shit!

The Yanks look pathetic pleading with the Chinese every few weeks.

They are desperate ,the game they are playing in so transparent ,they make all these statements before they go ,to make them look "tuff" on China to their domestic market ,they get their with a begging bowl in hand 

Last time Yellen went there with demands laid out before hand publicly ,the minute she got on the plane to leave China they canceled 1.5 million tones worth of grain orders with the USA and Australia

Scholz played a similar game ,he landed in China to be met by the deputy Mayor of the place his plane landed 

They don`t need dirt on anyone ,the fact that everyone's flying to China tells you who`s in control of the game ,just look at the four points they outlined to Scholz ,basically they sent him home with some homework to do when you have completed it ,then come back and we can talk again 

[Long time lurking]

20 minutes ago, reformed nice guy said:

https://www.bbc.co.uk/news/business-68874849

UK government borrowing higher than forecast

Despite the fiscal drag
Despite the massive population increase
Despite the increasing taxes
Despite extra north sea oil tax
Despite the currency devaluation

The short term gilts are about 5% so that will be a lot more interest due in the next 12months.

We are in a debt spiral

The US empire are all going to have to print at some point,no ones going to bail them out this time so it`s print or outright default either way it will be viewed as the same,the end result will be the same ,remember the Asian financial crisis the "west" is going to have it`s own version   

[Axeman123]

24 minutes ago, Long time lurking said:

It`s down to the importing country to regulate their imports ,the USA`s opioid crisis manifested itself with Oxycontin ,Fentanyl took over when that was shut down ,almost all of which comes from Mexico

There can`t be a lot of heroin left on the market in Europe, since the Taliban have taken over Afghanistan have seen a 95% reduction in poppy production ,something will replace that   

I don't disagree. The Yanks either need to grow up and legalise but strictly regulate recreational Opium for adults, or go for some Singaporean style harsh measures against the illegal trade. The half measures etc are the worst possible state.

AIUI the Chinese position is that they signed treaties about specific molecules decades ago and that is all they will regulate, which is fair enough tbh. The yanks have a habit of letting their executive branch make things up on the fly and then expecting the world to keep track of it.

AIUI cartels in Mexico actually imported poppies to grow and produce opium from which was then crudely acytalated to produce "black tar heroine", effectively diversifying their product range and vertically integrating production. AIUI pretty much every illegal drug in the US is now just a different blend of Xylazine/Fentanyl/Methamphetamine - The spics are as cunning as the chinks it seems.

[Onsamui]

2 hours ago, DurhamBorn said:

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.

 

Surely this is still money printing behind the back door?

[Long time lurking]

14 minutes ago, Axeman123 said:

I don't disagree. The Yanks either need to grow up and legalise but strictly regulate recreational Opium for adults, or go for some Singaporean style harsh measures against the illegal trade. The half measures etc are the worst possible state.

AIUI the Chinese position is that they signed treaties about specific molecules decades ago and that is all they will regulate, which is fair enough tbh. The yanks have a habit of letting their executive branch make things up on the fly and then expecting the world to keep track of it.

AIUI cartels in Mexico actually imported poppies to grow and produce opium from which was then crudely acytalated to produce "black tar heroine", effectively diversifying their product range and vertically integrating production. AIUI pretty much every illegal drug in the US is now just a different blend of Xylazine/Fentanyl/Methamphetamine - The spics are as cunning as the chinks it seems.

The trouble is if you have a corrupt country importing those regulated molecules/chemicals ,as in producing the correct paper work which i suspect is the case with Mexico ,how can any country be held responsible other than the importer 

[wherebee]

1 hour ago, JREWING said:

Skinny Shaz in Oz

She ain't happy but she'd put a smile on my face.

Getting bad all over now. 

A good point is it's getting getting so expensive to pay someone to build a house and the materials are blowing out in cost.

There is the clue. You'll own a trailer and be happy. Glad I'm an old cunt in his final quarter of life as this won't end well for the 99 percent.

 

problem is that people of her generation voted for green/labor, which is the major driver behind both mass immigration and energy price spikes, which in Australia drives up EVERYTHING as the supply lines are so long.  

What do the comments say?  calling out the left?  or blaming the nasty right wingers again?

 

oh, and she's paying 2.53 a litre in Queensland; down here in Vic it's 1.85-2.00 a litre and has been for six months.  Blame local state taxes for that, love, and again you have a Labor gvt there in Queensland.

[Yadda yadda yadda]

1 hour ago, Axeman123 said:

I am not for it per se, but there is some validity there. Pensions enjoy tax perks on the basis they are for retirement spending, and some people are "creatively" using them as an IHT vehicle. It also seem perverse to punish a family for someone dying before 75, since that is a tragedy in itself.

I would scrap all taxes etc, but if we are keeping them I don't find IHT on pension pots the greatest injustice tbh.

If someone dies before 75 the state should be grateful that they're claiming vastly less state pension than average.

[JREWING]

2 hours ago, DurhamBorn said:

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.

 

Pin that post to a flag pole and raise it to the heavens, I'd put a tick in that box next to your name my friend.

[Plan-b]

11 minutes ago, Yadda yadda yadda said:

If someone dies before 75 the state should be grateful that they're claiming vastly less state pension than average.

I imagine the UK state's view would be..

'Thanks for dying so soon. We'll be using your IHT and unspent pension on such UK enhancing goodness as the freshly imported and the pointless - they don't grow on trees you know. If your going in the oven make sure you burn cleanly or else we'll tax you and your family for your polluting emissions'

[Errol]

1 hour ago, Long time lurking said:

Rumors are Bliken is going to China with a ultimatum stop helping Russia or we will sanction any bank that processes payments from them 

And China will just laugh. The West threatening China is absurd.

[Cattle Prod]

On 20/04/2024 at 21:09, One percent said:

The question is, why would they do that and why now?  They must know the consequences so why do it?  It’s like watching chess, they know the ramifications of each move, six moves out.  

That's a very good question, and I wish more people would ask it.

They do, this originates in the US Department of Defense. They war gamed this out years ago, as they saw exporting dollars has hollowed out the defence supply chain to China, and is now a huge national security issue. AFAIR, the Treasury department did not want to take the step of sanctioning foreign reserves, but were pushed by DoD. Sorry I don't have source to quote for that, but pretty sure Luke Gromen covers it.

It's classic Dutch Disease, if you can print your main export (dollars) your industries will atrophy just as they do when you dig your money out of the ground practically for free (oil and gas). So that's what it's about. They want the UST export racket killed, which means deficit spending killed and/or dollar devaluation so that the dumb fuck politicans have to build up domestic industry again. The Inflation Reduction Act was the first salvo. You'll notice that came out of nowhere with a bow on it not long after those reserves were sanctioned. Now fully stolen. Bear in mind that these are people who are ready to make decisions about nuking millions of people, they could care less about the economic consequences of killing the UST. Deficit spending gone? Fuck you assholes! Suck it up, stick your NFTs where the sun don't shine and build me a goddam ball bearing factory.

Edited April 23 by Cattle Prod

[Cattle Prod]

On 20/04/2024 at 21:40, Joncrete Cungle said:

Forum related to one of my hobbies has an investment thread that I read from time to time. Gold is still viewed as a useless barbaric relic, Gordon Brown was right to sell etc. Gold and silver are still miles away from mainstream thinking in the West.

If that thread ever switches to talking about  buying miners and Bullion I will have my finger hovering over the sell button.

Keep us posted JC, these are very good contrarian indicators. Unfortunately my favourite one in my office got made redundant. Did they not see his immense value ffs??

[Harley]

Ah, when to sell!  Commodities taking a bash these last few days.  IMO, time like this you need a system to make the call to sell or hold.  Lance Roberts on Thoughtful Money has mentioned the 20 SMA as the first line (so of interest to traders - and algos!).  With a twist - don't sell immediately price falls below it but wait to see if there is a rebound.  I've taken his suggestion and sold a few which didn't but have held others (when I would normally have sold based on my previous approach).  Always up for improvement.  Let's see!  Anyone else have sell side algos they follow?