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

[Long time lurking]

2 minutes ago, Lightscribe said:

Short answer: shit hits fan.

If the BoE and ECB ‘decides’ to follow suit then we’ll see the £ and € follow in short fashion 

https://www.ft.com/content/0112fe8d-856f-43aa-9bbb-c2106b00b5d6

https://archive.ph/8HMB0

JPY falling is worse for the USA than it`s for Japan ,the jury is out on that one for me ,the FED isn't cutting any time soon IMO

It`s the same cycle over and over US`t yields start rising ,the jawboning about rate cuts start over and over for the last twelve months ,whats happened ?

[ashestoashes]

14 minutes ago, Van Lady said:

Hmmmm….I’m not so sure about that.

I’ve read over the years about the so called black market being huge and cash driven.

I’d guess the folk involved in that area of the economy aren’t going to give up quietly.

they'll have to interact with the system for doctors, hospital visits, taxes etc

[Calcutta]

2 hours ago, Lightscribe said:

You can see the Irish not taking it lying down, they’re akin to the French. They have a genetic inbred link to know when they’re being fucked over. 

Us on the other hand… I haven’t the faith you have. Too placated with BTL, house prices and ever lasting cheap debt. 

Only have to look at the differences between the farmers protests between us and everywhere else.

At night the streets belong to us.

Politics and protests and house prices and debt are for the nice people.

How many armed response units do the police in England have? Id be willing to wager there isn't enough firepower in government hands to control one medium sized town per county. 

The fact of the matter is that none of us give a shit about politics, we just do what we have to do to survive and thrive in the situation we've been dealt. 

Jimmy Barbeque.

[Mandalorian]

Penny starting to drop

https://www.telegraph.co.uk/money/tax/tories-killed-off-aspiration-workshy-britain/

Why it’s not worth working hard in Tory Britain

From cradle to grave, punishing tax traps discourage high-achievers from progressing

 

[sancho panza]

Apparently this was in the print edition of the DM.

Looks like we're getting ready to rumble. 

@Joncrete Cungle and anyone else, keep us posted on your market top indicators .

Articles like this are early stage bull indicators imho.

Daily Mail 26/4/24

Is it time to cash in on the GOLD RUSH? Mining stocks could provide a glittering opportunity

But in recent months thousands of customers at the US cash-and-carry giant Costco have been putting one-ounce bullion bars into their trolleys.

They are spending as much as $200m a month, according to Wells Fargo, a bank set up to handle cash flows from the 1849 gold rush.

Hedge funds and central banks in China, Turkey and other nations are also buying, driving up the price of the metal over the past six months by 20 per cent to $2,360.

Gold appears to have assumed its age-old role as a safe haven and a store of value.

So optimistic are the forecasts for further price increases that this latter day gold rush seems like a glittering opportunity.

BHP's £31billion bid for Anglo-American launched this week also hints at the likelihood of more merger and acquisition fun in the metal mining industry.

Citigroup predicts that bullion will 'shine bright like a diamond', rising to $3,000 within six to 18 months.

Goldman Sachs estimates a price of $2,700 by Christmas, although, even at this level, gold would still be below its record high of June 1980 in real terms. As the Soviets invaded Afghanistan, the price hit $850, the equivalent of $3,180 today.

These estimates are based on concern about mounting unrest in the Middle East – and the view that inflation has yet to be quashed, especially given the spiral in US government debt. Evy Hambro, joint manager of the BlackRock World Mining trust and BlackRock Gold and General fund, highlights a shift in investors' preferences.

Gold exchange traded funds (ETFs) hold bullion on your behalf. Broker Interactive Investor recommends the iShares Physical Gold ETF in which I have a small amount of money.

Gold mining stocks could be worth a bet: the surge in the price of this metal means that these companies' steep production costs should be covered.

Edited April 27 by sancho panza

[desertorchid]

6 hours ago, Lightscribe said:

Short answer: shit hits fan.

If the BoE and ECB ‘decides’ to follow suit then we’ll see the £ and € follow in short fashion 

https://www.ft.com/content/0112fe8d-856f-43aa-9bbb-c2106b00b5d6

https://archive.ph/8HMB0

There are other currencies that are also weak links in the chain  . The Thai Baht is another good example that looks ready to keel over. Could there be another Asian financial crisis?. Any country that is trying to keep rates lower than the FED are facing their day of reckoning when the big players twig on USD higher rates may be here to stay

Edited April 28 by desertorchid

[wherebee]

Very good point - non commodities back asian countries could be extremely screwed, especially as most need USD to import the oil needed for modern life.

I wonder if the Russians will step in to help with oil and grain, as they did with Egypt?

[Errol]

7 hours ago, sancho panza said:

 

Gold exchange traded funds (ETFs) hold bullion on your behalf. Broker Interactive Investor recommends the iShares Physical Gold ETF in which I have a small amount of money.

So their recommendation is to buy something that isn't actually gold.

[M S E Refugee]

Have any high-rollers on here thought about buying Gold Britannia's or Sovereigns to supplement their Pension?

If I had bought 1 Sovereign per month all my working career I would have amassed 420 Sovereigns worth £201,450.59, all CGT free.

 

Edited April 28 by M S E Refugee

[Pip321]

So a Tory has switch camps.

Every month or so (probably around my period😆) I have a rant about the left/right true politics died decades ago now it’s just career politicians feathering their own nest then fucking off to the dinner circuit or a job as adviser at some city firm when they ‘retire’  

Anyhoo….I see some politicians seem to be able to alter their whole political belief system that differentiates capitalism/socialism and just change the colour of their tie.

To be fair this used to happen in the old days when a politician ‘saw the light’ and shifted sides….but I suspect this move is because he wants to stay an MP after the next general election.😂

#vote none of the above

If I saw a guy in Durham running for office for the “shag the decent birds on bennies” party….

with the slogan “we paid for them so we should shag them”

I may have to decide whether that truly encapsulated my political beliefs but it would certainly get my vote before red, blue or that orange/yellow one we have forgotten about. 😆😆

[Joncrete Cungle]

9 minutes ago, M S E Refugee said:

Has any high-rollers on here thought about buying Gold Britannia's or Sovereigns to supplement their Pension?

If I had bought 1 Sovereign per month all my working career I would have amassed 420 Sovereigns worth £201,450.59, all CGT free.

 

Yes, a bloke I worked with when I was in my teens did just that. Every month for years he bought a sovereign or half sovereign on pay day for cash and stashed it.

[SpectrumFX]

9 minutes ago, M S E Refugee said:

Has any high-rollers on here thought about buying Gold Britannia's or Sovereigns to supplement their Pension?

If I had bought 1 Sovereign per month all my working career I would have amassed 420 Sovereigns worth £201,450.59, all CGT free.

 

I don't know about high rollers, but I remember somebody on hpc who was on benefits, and buying a sovereign a month, with a view to selling one a month in retirement.

Can't remember who it was though.

[M S E Refugee]

1 minute ago, Joncrete Cungle said:

Yes, a bloke I worked with when I was in my teens did just that. Every month for years he bought a sovereign or half sovereign on pay day for cash and stashed it.

For most of my career as a Postman, the price of a Sovereign has pretty much worked out as costing a week's pay after tax.

[M S E Refugee]

2 minutes ago, SpectrumFX said:

I don't know about high rollers, but I remember somebody on hpc who was on benefits, and buying a sovereign a month, with a view to selling one a month in retirement.

Can't remember who it was though.

Assuming that Gold continues to keep it's purchasing power as it has done for the last 5000 years then having a decent stash of CGT free Gold will be vital for people who want to minimise their tax bill and retain purchasing power when they come to draw their Pension.

[Yadda yadda yadda]

50 minutes ago, Pip321 said:

If I saw a guy in Durham running for office for the “shag the decent birds on bennies” party….

with the slogan “we paid for them so we should shag them"

Obviously such a party would get my vote. However, I would hope that it recognised that the sloganed policy is a Ponzi scheme. A unique one with a duel currency deposit system but ultimately breeding unsustainability.

[Yadda yadda yadda]

42 minutes ago, Joncrete Cungle said:

Yes, a bloke I worked with when I was in my teens did just that. Every month for years he bought a sovereign or half sovereign on pay day for cash and stashed it.

Fair play but that isn't something he should be telling anyone.

[Errol]

Starmer promising to keep the triple lock is the Express front page headline today.

Edited April 28 by Errol

[PatronizingGit]

10 hours ago, Mandalorian said:

Penny starting to drop

https://www.telegraph.co.uk/money/tax/tories-killed-off-aspiration-workshy-britain/

Why it’s not worth working hard in Tory Britain

From cradle to grave, punishing tax traps discourage high-achievers from progressing

 

Add in all the non income based taxes fuel duty, council tax etc and its hardly just the 'over 100k' who ought to consider calling it quits & going on benefits. 

So far its generally been the preserve of women with kids to do that. But with PIP & the simple fact most men work to support a family, something that is increasingly denied millennials & zoomers, the obvious conclusion is 'why bother'

 

[Yadda yadda yadda]

Some thoughts above on revolution and the likely necessity for the true middle class, using traditional definitions, to be feeling the pinch. The thinking being that revolutions have usually been led by those that think they have a right to power and wealth rather than the poor. That may be the case but it doesn't need follow that it will be next time. We now have a large number of middle income workers, not middle class by this definition, that are struggling. They feel entitled to a living standards that is moving further and further out of their grasp. They don't even need to lead a revolution to support it. Even so many of the young middle class are struggling. I don't know many but my sister married up into that world so I know some. People whose dad is a member of a Pall Mall club, went to an expensive school but cannot afford to buy their own home. Their dad will eventually be able to help them out but they will be a decade behind.

We also have a working and non-working class that are seeing their living standards erode. The uplift in bennies is partly because this group is seen as a more likely short term problem. Many of them have little loyalty to the country. A revolution does not have to be in my interests.

I also don't think the digital control agenda does much to prevent a revolt. Violence cannot be digitally controlled. You need flesh and blood to crack heads.

Edited April 28 by Yadda yadda yadda
Embarrassing who's/whose faux pas. Should have proofread and I'll blame autoincorrect

[Pip321]

42 minutes ago, M S E Refugee said:

For most of my career as a Postman, the price of a Sovereign has pretty much worked out as costing a week's pay after tax.

That is my view of gold….not an investment, not clever, not to get rich, not to buy a life of riches.

It’s just money….like a weeks wages.

It’s the rock in the river which doesn’t move and the currencies we measure it in swish around and change levels/value making the rock appear higher or lower….but the rock hasn’t moved.😎😉 

[Axeman123]

11 minutes ago, Yadda yadda yadda said:

Some thoughts above on revolution and the likely necessity for the true middle class, using traditional definitions, to be feeling the pinch. The thinking being that revolutions have usually been led by those that think they have a right to power and wealth rather than the poor. That may be the case but it doesn't need follow that it will be next time.

One arguement is that it is the educated status of the middleclasses that was necessary for a coherent agenda to coalesce and a strategic plan to be articulated, rather than just random spontaneous aggro that traditionally resulted from the working classes feeling angry but not knowing why*. It isn't a coincidence that the height of football hooliganism in this country coincided with the worst inflationary decade of the 1970s.

Education is much less of a class marker today, you have plenty of educated-yet-idiots and Mid-wits among the middle-classes, and also articulate switched on people at every level. Someone doesn't need a single GCSE or even literacy beyond needed to operate the internet to get access to brilliant minds and ideas. Tommy Robinson is actually pretty sharp etc, even if he didn't start out that way, and it is easy to see why he scares the establishment so much. Connor McGreggor is another example in Ireland.

TL/DR: This time it is different.

(*None of that is intended snobbishly etc)

[Errol]

23 minutes ago, Yadda yadda yadda said:

Some thoughts above on revolution and the likely necessity for the true middle class, using traditional definitions, to be feeling the pinch. The thinking being that revolutions have usually been led by those that think they have a right to power and wealth rather than the poor. That may be the case but it doesn't need follow that it will be next time. We now have a large number of middle income workers, not middle class by this definition, that are struggling. They feel entitled to a living standards that is moving further and further out of their grasp. They don't even need to lead a revolution to support it. Even so many of the young middle class are struggling. I don't know many but my sister married up into that world so I know some. People who's dad is a member of a Pall Mall club, went to an expensive school but cannot afford to buy their own home. Their dad will eventually be able to help them out but they will be a decade behind.

We also have a working and non-working class that are seeing their living standards erode. The uplift in bennies is partly because this group is seen as a more likely short term problem. Many of them have little loyalty to the country. A revolution does not have to be in my interests.

I also don't think the digital control agenda does much to prevent a revolt. Violence cannot be digitally controlled. You need flesh and blood to crack heads.

Robot AI enforcers will keep order.

[Yadda yadda yadda]

11 hours ago, Mandalorian said:

Penny starting to drop

https://www.telegraph.co.uk/money/tax/tories-killed-off-aspiration-workshy-britain/

Why it’s not worth working hard in Tory Britain

From cradle to grave, punishing tax traps discourage high-achievers from progressing

 

Very good by the Telegraph pointing out that the well paid are taxed to apathy. Now do it for middle income earners by comparing their take home to their costs including council tax. Has anyone in the media pointed out that spending must be cut in order to cut taxes. Without reading the Telegraph in detail I suspect they're in favour of the planned ramping up if defence spending. Ending that piece by attacking Labour for likely being even worse for the well off than the Tories is weak.

Tough choices need to be made. Someone has to lose out. Either it is the well off, the middle, the working poor, pensioners or the benefits classes. I doubt that one of those groups alone can take the pain. In my view the working poor have nothing left to give. Take more and the move to benefits will exceed the tax received. Many on benefits are really struggling but this is partly due to profligate expectations. I think they can be squeezed but the Government probably won't agree. Pensioners probably have the biggest pile of disposable income and they will be targeted. Not those one state pension only but definitely those on large personal pensions whether DB, DC, private or public sector. They will be taxed more on their income. Could there be a law reducing the scope to retire early without penalty? I think this is inevitable. Perhaps along the lines of the proposed smoking ban. Born after, say 1970, and no early access to your retirement pot, perhaps? Or a reduction in the access period to five years before state pension age. Make sure you're saving in ISAs or PMs whilst you can. This is one way the well off will be further targeted and public sector pensions will be partly reneged upon. As mooted private pensions will be directed towards state spending too. There isn't much more to be taken from the middle but these pensions policies applies to the more furgal of them, including myself.

Bit of a ramble but I'm on my way to my parents and I may pass this joyous view on to them when I arrive. Aren't they lucky 

[Yadda yadda yadda]

21 minutes ago, Errol said:

Robot AI enforcers will keep order.

That is a long time away and robots will always have weak points. Simply blow up the depot or cut it's power supply if nothing else is obvious.

[Noallegiance]

16 hours ago, Long time lurking said:

It`s a hard one to answer is that ,they still are a large manufacturing nation ,this will undoubtedly help in that regard but they also import most of the raw materials

Then they have a huge national debt ,but it`s mostly held by the country itself ,much like China in that respect 

My guess is something is either about to break ,or Japan has given the USA the bird regarding the hypothesis made at the end of the film Princes of the Yen and the lose $-JPY peg 

Long and the short ,they either have a plan ,or the shit is about to hit the fan either way it`s not good for the USA 

Just started watching Princes of the Yen.

Terrifying. It doesn't matter which government is in charge. The plebs are for pushing around and sacrificing in the great game of PlayStation Country Leader Career Mode.