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Credit deflation and the reflation cycle to come.


DurhamBorn

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No Duff (troll)
1 hour ago, Thorn said:

What do people think will happen with derivatives.

 

Be used to explain your bank's bail-in!

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No Duff (troll)
1 hour ago, PatronizingGit said:

...... Most these 'trade' talks May does with india seem more about 'labour mobility' (ie, filling UK posts with Indians)

So true.  And it's already decimated the IT industry as the money flows out of the country.

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Ok,as people were talking about platinum and gold il share some numbers not easy to get for ordinary investors.

Friday saw commercial traders in Platinum heavily long across most timescales going forward,retail (the dumb money) was only 10% bulls.

When gold hit fridays low it also smashed sentiment down.It hit only 9% retail bulls,the last time it was so low was 2016,and the time before that was when gold hit its low in 2015 of $1040.

The aussie and Canadian currency saw numbers down to only 7% retail bulls,and the US dollar 86% retail bulls.This will be due to all the tariff talk etc.My 95 target in the dollar was hit,but 96 is still a maybe,but after that i expect the dollar to then move down to the 86 area (while the market looks for a higher dollar).

Whenever these numbers are as extreme as they are now,its never long before a turn.

 

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3 hours ago, Thorn said:

It seems to be somewhere between 12 and 542 Trillion dollars.

Which demonstrates the problem quite nicely, that range of figures is minor speed bump to economic meltdown!

If its $542 Trillion and someone somewhere gets their figures wrong by 1%......  Got a billion $ down the back of the sofa?

 

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1 hour ago, DurhamBorn said:

Ok,as people were talking about platinum and gold il share some numbers not easy to get for ordinary investors.

Friday saw commercial traders in Platinum heavily long across most timescales going forward,retail (the dumb money) was only 10% bulls.

When gold hit fridays low it also smashed sentiment down.It hit only 9% retail bulls,the last time it was so low was 2016,and the time before that was when gold hit its low in 2015 of $1040.

The aussie and Canadian currency saw numbers down to only 7% retail bulls,and the US dollar 86% retail bulls.This will be due to all the tariff talk etc.My 95 target in the dollar was hit,but 96 is still a maybe,but after that i expect the dollar to then move down to the 86 area (while the market looks for a higher dollar).

Whenever these numbers are as extreme as they are now,its never long before a turn.

 

It's difficult to read between the lines sometimes DB and of course I'm DYOR

I bought USD via a online currency company a few months back (after what you saw so thanks for that) £10k bought me $14,150.00 USD deliverered to my door. So it's current value is around £10,656.00. I nice little profit. If you say the USD is going to turn back down to the 86 area, now is a good time to sell it, or wait for the bounce and turn again and possible parity with GBP in the future. What do you see? Also would the turn affect IBTL?

I also have around £25k in PM's around £15k in gold sovereigns and £10k in silver Britannias (from coininvest bullionbypost and Atkinsons) also the miners recently picked up £10k in each of Harmony and Sibanye. I'm happy to keep all this for a very long time and not trade, just sit tight.

If trade wars esculate maybe demand for silver/ commodities will fall further? Better time to buy more then?

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NogintheNog
6 hours ago, DurhamBorn said:
6 hours ago, NogintheNog said:

Just out of interest DB, what about the PM 'streamers' as opposed to the miners. Wheaton Precious Metals, Franco Nevada Corporation being the most obvious?

Probably good investments,though they are already quite highly rated.In a gold bull though i prefer the miners because they own the ounces in the ground.At this stage of a cycle they price gold miners shares on profits,but in a gold bull you start to get people talking about ounces in the ground.Some of the miners have market caps of only $20 an ounce in the ground (and thats reserves,not resources).If gold went to $2000 and then the market started to value miners at $200 an ounce in the ground we see the potential.

Thanks for the reply DB. I'm long on both those Companies, Franco Nevada being the better performer so far. That would change I'm sure if Silver outperforms Gold in any future PM price break out. Assuming we get that at some point of course.

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32 minutes ago, harp said:

It's difficult to read between the lines sometimes DB and of course I'm DYOR

I bought USD via a online currency company a few months back (after what you saw so thanks for that) £10k bought me $14,150.00 USD deliverered to my door. So it's current value is around £10,656.00. I nice little profit. If you say the USD is going to turn back down to the 86 area, now is a good time to sell it, or wait for the bounce and turn again and possible parity with GBP in the future. What do you see? Also would the turn affect IBTL?

I also have around £25k in PM's around £15k in gold sovereigns and £10k in silver Britannias (from coininvest bullionbypost and Atkinsons) also the miners recently picked up £10k in each of Harmony and Sibanye. I'm happy to keep all this for a very long time and not trade, just sit tight.

If trade wars esculate maybe demand for silver/ commodities will fall further? Better time to buy more then?

No dont sell the dollars,sterling hit my target of $1.41 and i dont think it will go back to that.Your PM holdings will outperform the dollar weakness anyway.The balance is what counts.I also wouldnt sell IBTL,its a hedge against a big deflation.I am going to pick up some Sibanye again myself this week,and i already own Harmony,both risky,but im happy to hold them through things like you say.I think il get some more silver in Bullionvault myself as well.Political risk is a problem with them,but SA needs miners to expand again,and the new mining charter looks ok to me and fair to the companies and the local communities.The rand price is always the worry for them both,550k a kilo and they will be at around 16% margins.At 650k their share prices would treble id expect.

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The currency side of things is really hard to see. Thanks for what you share DB.

...income tax going up to “fund the NHS” is another squeeze on those of us that work.

but really it reinforces that things are out of balance and there’s something not right out there.

 

 

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No Duff (troll)
1 hour ago, Thorn said:

....

but really it reinforces that things are out of balance and there’s something not right out there.

 

 

Low wages so low income tax take but high corporate profits but a low corporation tax rate so a low tax take.

Then there's the increased social on-costs of FOM not balanced by increased income tax receipts (ie. FOM is a net cost).

FOM makes a bit more sense if our benefits systems are aligned and we adopt a more typically european contributory based system.

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8 hours ago, Thorn said:

The currency side of things is really hard to see. Thanks for what you share DB.

...income tax going up to “fund the NHS” is another squeeze on those of us that work.

but really it reinforces that things are out of balance and there’s something not right out there.

 

 

I have friends who get £2k a month in benefits,out several times a week for meals etc.I have friends on £1.1k a month working hard paying income tax.They might freeze the income tax bands for a few years,or they might increase NI.My daughter works in the NHS,the waste is incredible.Buying boxes of pens for £20 you can get in Home Bargains for £1.50 because you have to use certain suppliers,cupboards of stock that gets thrown out because its out of date,but is simply re-ordered in the same amounts again.Hospitals pretty much let old people die these days and they dont seem very interested in getting you better once your over 70.

The best thing people can do is try to stay healthy and avoid the NHS.

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7 hours ago, No Duff said:

Low wages so low income tax take but high corporate profits but a low corporation tax rate so a low tax take.

Then there's the increased social on-costs of FOM not balanced by increased income tax receipts (ie. FOM is a net cost).

FOM makes a bit more sense if our benefits systems are aligned and we adopt a more typically european contributory based system.

Yes and not just low wages.They had to increase the tax free allowance to try to make work pay.That means more and more people who are debt free and have some investment income can work much less.Thats exactly what i did.I was earning £40k paying lots of tax.I went self employed and work around 4 hours a week to earn £12k.On top of that it means i can save even more tax by doing jobs myself around the house/car etc.I can also buy everything 2nd hand on Facebook groups/Gumtree so no VAT.Much less fuel tax as well as i now only use £15 a week diesel.

In simple terms its crazy to work more than the tax allowance in the UK,unless you put it away into a SIPP or something.

 

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sleepwello'nights
8 minutes ago, DurhamBorn said:

Buying boxes of pens for £20 you can get in Home Bargains for £1.50 because you have to use certain suppliers,cupboards of stock that gets thrown out because its out of date,but is simply re-ordered in the same amounts again.Hospitals pretty much let old people die these days and they dont seem very interested in getting you better once your over 70.

The best thing people can do is try to stay healthy and avoid the NHS.

On the scale of things your stationery example is very trivial. I know there are some suppliers who give the NHS very good value on supplies. And I have stories about private companies putting expensive procedures in place to control trivial expenses whilst ignoring other areas where better controls are needed that would be far more cost effective.

The real issue with the NHS is staff cost. Why FFS do they employ agency nurses when they could just administer their own bank staff at far lower cost? 

The issue is scale, large organisations inevitably generate waste. Senior managers should not micro manage. The most successful investor I know of, Warren Buffet, uses a simple means of exercising control. Return on investment, he leaves the businesses he invests in to run themselves. Provided he gets the return he expects he leaves people to get on with their jobs. The trick is channelling their energies in a way that benefits the organisation, and society.

 

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Just now, sleepwello'nights said:

On the scale of things your stationery example is very trivial. I know there are some suppliers who give the NHS very good value on supplies. And I have stories about private companies putting expensive procedures in place to control trivial expenses whilst ignoring other areas where better controls are needed that would be far more cost effective.

The real issue with the NHS is staff cost. Why FFS do they employ agency nurses when they could just administer their own bank staff at far lower cost? 

The issue is scale, large organisations inevitably generate waste. Senior managers should not micro manage. The most successful investor I know of, Warren Buffet, uses a simple means of exercising control. Return on investment, he leaves the businesses he invests in to run themselves. Provided he gets the return he expects he leaves people to get on with their jobs. The trick is channelling their energies in a way that benefits the organisation, and society.

 

Well yes,iv seen lots of performance that would be sacked in the private sector.The point is more money wont solve anything.Like you say iv seen bank nurses driving 100 miles because they are getting £30 an hour.Crazy.

 

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No Duff (troll)
52 minutes ago, DurhamBorn said:

On top of that it means i can save even more tax by doing jobs myself around the house/car etc.

That's my strategy.  People forget to cost things in pre tax income (ie. gross up 40% or so).  But love it in so many ways.  Sure, saved so much, but also learnt so much, got far better results, and am so satisfied. Ronnie Barker said no one got rich wasting money.  People waste so much time and money.  A blank sheet of paper, intestinal fortitude, and a finance bod could change their lives.

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No Duff (troll)
8 hours ago, No Duff said:

FOM makes a bit more sense if our benefits systems are aligned and we adopt a more typically european contributory based system.

Even Nick Clegg was pointing this out this morning, but maybe as part of the continued attempt (contempt) to stop Brexit, 'cause the politicians did shite all at the time.  I believe he pointed out a Brit cannot get unemployment pay in Germany until 4 years residency.

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No Duff (troll)
49 minutes ago, DurhamBorn said:

Much less fuel tax as well as i now only use £15 a week diesel

Yup, scary how expensive going to work can be, financially and otherwise.

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leonardratso

bah, forgot about cobham, defence guys, looks like they are the darling of the day this morning.

All this merger shite going on for last few months is very reminiscent of pre GFC activity is it not?

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28 minutes ago, No Duff said:

That's my strategy.  People forget to cost things in pre tax income (ie. gross up 40% or so).  But love it in so many ways.  Sure, saved so much, but also learnt so much, got far better results, and am so satisfied. Ronnie Barker said no one got rich wasting money.  People waste so much time and money.  A blank sheet of paper, intestinal fortitude, and a finance bod could change their lives.

Just washing the car saves £5+ tax and NI.

I re double glazed my whole house including doors for £3400.I save around £50 a week on food alone by having more time and thats eating very well.£3k a year with tax and NI.

Its a bit like paying your mortgage off.Saving £400 a month is actually saving £7200 a year for a basic rate taxpayer.Throw in a lease car at £250 a month over say £300 a year keeping an older car on the road another £3300 saving.Add a two week holiday to Spain another £3k.£1.5k in less fuel to work.

If im making £12k a year without those costs someone needs to earn £29.5k a year to be the same.Add on income from an ISA of £5k they are the same off on £37.5k as i am on £12k.

Living is very cheap in the UK if you pay off a house,run a decent older car you can fix a lot yourself on and avoid holidays abroad.Go without early,work and save hard and have a plan.The housing part of course is making things a lot harder for people.You can still do it where i live though.

Not for everyone of course and each to their own.

 

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No Duff (troll)
39 minutes ago, DurhamBorn said:

Not for everyone of course and each to their own.

Indeed, although there are tangental aspects such as this which are relevant to this thread.  Lot of things to sort out other than just your portfolio - personal financial and mental resilience amongst them.

I analysed 5 years of expenditure as part of pre-retirement planning.  Realised how much going to work costs but also how much I could save regardless (eg. car costs).  You can't control what you don't measure.

Less is more!

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51 minutes ago, DurhamBorn said:

Just washing the car saves £5+ tax and NI.

I re double glazed my whole house including doors for £3400.I save around £50 a week on food alone by having more time and thats eating very well.£3k a year with tax and NI.

Its a bit like paying your mortgage off.Saving £400 a month is actually saving £7200 a year for a basic rate taxpayer.Throw in a lease car at £250 a month over say £300 a year keeping an older car on the road another £3300 saving.Add a two week holiday to Spain another £3k.£1.5k in less fuel to work.

If im making £12k a year without those costs someone needs to earn £29.5k a year to be the same.Add on income from an ISA of £5k they are the same off on £37.5k as i am on £12k.

Living is very cheap in the UK if you pay off a house,run a decent older car you can fix a lot yourself on and avoid holidays abroad.Go without early,work and save hard and have a plan.The housing part of course is making things a lot harder for people.You can still do it where i live though.

Not for everyone of course and each to their own.

 

That's how I see things.  I try to explain this to people and they just stare at me with blank faces. As you say, a lot easier up north too.

Thanks for the thread DB it's invaluable.

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Game_of_Homes
On 14/06/2018 at 14:55, Cosmic Apple said:

Covered over on ToS a while back. Bullionvault for stored. Silver-to-go was the mentioned favorite for VAT free silver coins (Britannia), used them twice and been good. 

Storage is difficult - if you've seen the hiding spot in the movies, its no good :) In the fabric of the building is good, hard for a renter.

Do you have to buy your silver from Bullionvault to have it stored there? I mean can you buy it from Silver-to-go and store it in Bullionvault?

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3 minutes ago, Game_of_Homes said:

Do you have to buy your silver from Bullionvault to have it stored there? I mean can you buy it from Silver-to-go and store it in Bullionvault?

No,Bullionvault has the PMs in their vaults,you then own part of it.Its system is a bit like Betfair.You buy and sell to other people and there is a little bit of a spread.For ordinary people though its a great system.Its really a very cheap way to have access to pretty much spot prices while still owning the physical.You can start with tiny amounts so say £100 in silver and away you go.

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Game_of_Homes
Just now, DurhamBorn said:

No,Bullionvault has the PMs in their vaults,you then own part of it.Its system is a bit like Betfair.You buy and sell to other people and there is a little bit of a spread.For ordinary people though its a great system.Its really a very cheap way to have access to pretty much spot prices while still owning the physical.You can start with tiny amounts so say £100 in silver and away you go.

It says on their site that if you hold silver in their vaults, you don't have to pay VAT. So how does that work. Do you pay VAT when you sell (and is it unavoidable)? Are there any coins that are VAT free and if so, does it make sense to buy coins rather than other forms of silver? What would you recommend? Also, what happens in the event that any stored PM is stolen? Is it insured for the whole value? (I am reading through the website now, but there is a lot in the FAQ). Thanks Durhamborn, you are a fount of knowledge (I've just bought some Centrica shares thanks to your advice!).

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3 hours ago, DurhamBorn said:

My daughter works in the NHS,the waste is incredible.Buying boxes of pens for £20 you can get in Home Bargains for £1.50 because you have to use certain suppliers,cupboards of stock that gets thrown out because its out of date,but is simply re-ordered in the same amounts again.

My daughter sprained her ankle the other day so I took her to A&E. Took my crutches with me, too. Turned out I didn't need to - they unwrapped a brand-new ones for her. I asked whether I should return it directly to them when they'd be taking the cast off, or if I should bring it to my GP, but I think you can already guess what the answer was.

She needed it for a week and a bit, and it's been used as a flag pole/tent pole/pretend rifle ever since.

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1 hour ago, No Duff said:

Indeed, although there are tangental aspects such as this which are relevant to this thread.  Lot of things to sort out other than just your portfolio - personal financial and mental resilience amongst them.

I analysed 5 years of expenditure as part of pre-retirement planning.  Realised how much going to work costs but also how much I could save regardless (eg. car costs).  You can't control what you don't measure.

Less is more!

I agree,this thread is really about surviving and doing well out of the cycles we will see in our lifetimes.Part of that is indeed about lifestyles and skills.Living frugal while still enjoying life is a fantastic skill.Its also about actually looking at things with fresh eyes.

It sounds simple,but i look at it like this.I can live very well on £300 a week debt free,very well.So i need £15k a year.If i get £12k from the tax allowance i need £3k from investments.If get £8k from investments i need £7k from working/taxable incomes like pensions/self employed.

Pay house off,build investments in tax free wrappers,go from there.I see working your guts out to pay for government to hand out to other people as a mental illness.

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