Credit deflation and the reflation cycle to come.

[TheCountOfNowhere]

On 23/06/2018 at 10:58, Thorn said:

 

Surprisingly enough, 4 wee weeks over here in bloody NIreland.

Every time you then go home to say “Hey kids, guess what?” focuses the mind. 

Why did you not buy a house when the prices collapsed 50%, were you waiting for a bargain ?

[Gordie Lastchance]

6 minutes ago, TheCountOfNowhere said:

Went to see a friend of mine at the weekend who works for a large american bank ( in London ).

Word on the street is that everyone thinks it's the end of the world but they themselves think it's a storm in a tea cup.

No sign of any bank's in trouble ( they called the big french bank problems months before it went mainstream ).

However, there aint no jobs so everyone is trying to weather the storm !!!

One of the BBQ goers said her husband had been out of work 2 years with no sign of a job.  He's an "executive" and doesnt want to work in MacDonalds.

The words, divorce and throw the lazy c**t out, were used.  They will have to sell their property portfolio if the get divorced though ( a factor plenty of us would't have considered, as the 30 somethings in London who've piled into BTL/Debt hit that 10 years of unhappiness mark and decided enough is enough, plenty distress sales will appear, what's the divorce rate, 50% ? )

One person said, I kid you not, what's more important, you'r happiness or the shity flats you're losing money on.

My host, seems quite relaxed but the comment, "no point worrying when your up to your neck in debt" was quite revealing.  They were very happy to a house near them had gone under offer for 50% more than they paid last year though, last year they were telling me prices were down in that part of London, maybe they bought "the dip".  They were talking about getting a cheap kitchen into their £1.2M house, as they were skint.

Purely anecdotal and a small sample size but these are up beat city high flyer types who I've never heard a negative word from.

My friend looked old and tired suddenly.

 

"No point in worrying when you're up to your neck in debt" - meaning they know there'll be every amount of assistance thrown at them if things go pear-shaped? Relaxed because they've no personal experience of the busts of the past? Or have they lost all sense of fear because debt's the only way to go?

Get the feeling from you, though, sentiment's changing, Count. 

[Cosmic]

22 minutes ago, BearingUp said:

My question:  When I look at the prices of say Silver Britannias on Coin Invest there is a big discrepancy in price between the different types, e.g a 1oz Privy Mark Horse is £18.49 and a 1oz 'Normal' Britannia is just £15.58.  Is the difference just a collectors' premium according to perceived rarity?  For investing I presume it makes sense to just go for the cheapest one.

Yep just a premium for the design. If your buying it for the silver you want the cheapest ones, with CGT exemption

[Funn3r]

I recall someone on here saying you could pick up silver teapots and such cheap at auction. Is this the same quality of silver you get in silver coins? 

[Castlevania]

I paid VAT on the Canadian Superman coin, because I really wanted it.

Personally I don’t think buying more than a small amount of silver coins is the way to go, simply due to the premiums involved. For the cheapest coins you’re looking at a 20% premium over spot. I’d rather buy a physically backed ETC, which does give rise to some counterparty risk, but they are liquid and the bid offer spreads are tight. Or 1000 oz bars to be stored overseas in your own name if you’re minted (which sadly I’m not). 

[ash]

Hi All, 

Another Newbie signing up due to this thread, and what a thread it is! Thanks Durhamborn for starting it and all the other regular contributors for your excellent knowledge.  I've been a HPC reader and very occasional poster since about 2008 when shortly before I was pushed into buying my first house by my then GF despite having major jitters of a future crash.  Lo and behold a few months later my house was worth about 35% less than we paid for it.  Bugger!, I weathered the storm (alone) moved from Norwich to London for a better wage, bought renovated and lived on a boat to save ££ and rented the house in Norwich (yes sorry in my defence it was to a friend for a great price).  Early last year it felt like it was time to offload the Norwich house which had inflated way beyond what I bought it for in 2007, it sold within a couple of weeks for more than asking price which I thought was slightly mental. 

And here I am today. Holding a pretty decent amount of cash, waiting for a London property to become affordable. I liken myself to many people on here - I always buy second hand where possible, rarely buy new clothes, always try to get the best deal, maybe go on more Holidays than I should but we only live once. I drive a POS old Peugeot day to day but have a pretty pricey classic i'm restoring (one of the hyper inflated Marques so slightly concerned there) and another future classic (hopefully).

I'm now trying to maintain my capital until the time is right to buy again.  I've recently bought my first 500oz of silver delivered from GoldCore who I found excellent and were the cheapest I could find delivered to the door.  All nice shiney new 2018 coins too.  I will look to increase my holdings over the next few months.  I'm also looking at Miners, a friend told me about Hummingbird Resources, are they on anyone's Radar?

I've also had a few conversations with people a bit younger than me who missed the last crash in terms of being affected by it.  Most are turning 30 (i'm mid 30's) and pretty much all of them do not believe me that house prices go down or that its looking highly likely somethings about to hit a fan.

 

[DurhamBorn]

57 minutes ago, BearingUp said:

Phenomenally longtime lurker here from ToS.  I think it was about 2003/04 I started in preparation for STR in 2004 (who remembers "Minted BTL"?).  Not the best decision in hindsight but it's been great living mortgage and maintenance free for the past 14 years and having the freedom to invest where I want to.  We're fortunate as my wife gets a house with her job so I haven't had the pressure of feeling that I'm paying off someone else's mortgage.

Anyway, like the rest of you I'm loving this thread and I'm about to take the plunge and buy some silver coins.

My question:  When I look at the prices of say Silver Britannias on Coin Invest there is a big discrepancy in price between the different types, e.g a 1oz Privy Mark Horse is £18.49 and a 1oz 'Normal' Britannia is just £15.58.  Is the difference just a collectors' premium according to perceived rarity?  For investing I presume it makes sense to just go for the cheapest one.

Yes its a collector's premium.Nothing wrong with buying most in the cheapest (for investing),but adding a few each of a few you like the look of,they are beautiful.

[DurhamBorn]

28 minutes ago, Castlevania said:

I paid VAT on the Canadian Superman coin, because I really wanted it.

Personally I don’t think buying more than a small amount of silver coins is the way to go, simply due to the premiums involved. For the cheapest coins you’re looking at a 20% premium over spot. I’d rather buy a physically backed ETC, which does give rise to some counterparty risk, but they are liquid and the bid offer spreads are tight. Or 1000 oz bars to be stored overseas in your own name if you’re minted (which sadly I’m not). 

I agree,but for people just getting started i think a few coins and a few mining shares (at this stage in the cycle) are a good place to start,then like you say a physical backed ETC or similar.

[Inoperational Bumblebee]

57 minutes ago, Funn3r said:

I recall someone on here saying you could pick up silver teapots and such cheap at auction. Is this the same quality of silver you get in silver coins? 

I believe they are mostly sterling silver at 92.5%, rather than the 99.99% current silver Britannias are. The higher percentage of additional metals are to increase hardness and strength as they are utensils rather than investment grade coins that wouldn't expect to see much abuse.

[EDIT] Funny you should mention this, I looked on ebay recently for this kind of thing. Stuff tends to go for its scrap value at the spot price so I've decided it's not worth the bother looking, for me. You may have more luck!

[DurhamBorn]

5 minutes ago, ash said:

Hi All, 

Another Newbie signing up due to this thread, and what a thread it is! Thanks Durhamborn for starting it and all the other regular contributors for your excellent knowledge.  I've been a HPC reader and very occasional poster since about 2008 when shortly before I was pushed into buying my first house by my then GF despite having major jitters of a future crash.  Lo and behold a few months later my house was worth about 35% less than we paid for it.  Bugger!, I weathered the storm (alone) moved from Norwich to London for a better wage, bought renovated and lived on a boat to save ££ and rented the house in Norwich (yes sorry in my defence it was to a friend for a great price).  Early last year it felt like it was time to offload the Norwich house which had inflated way beyond what I bought it for in 2007, it sold within a couple of weeks for more than asking price which I thought was slightly mental. 

And here I am today. Holding a pretty decent amount of cash, waiting for a London property to become affordable. I liken myself to many people on here - I always buy second hand where possible, rarely buy new clothes, always try to get the best deal, maybe go on more Holidays than I should but we only live once. I drive a POS old Peugeot day to day but have a pretty pricey classic i'm restoring (one of the hyper inflated Marques so slightly concerned there) and another future classic (hopefully).

I'm now trying to maintain my capital until the time is right to buy again.  I've recently bought my first 500oz of silver delivered from GoldCore who I found excellent and were the cheapest I could find delivered to the door.  All nice shiney new 2018 coins too.  I will look to increase my holdings over the next few months.  I'm also looking at Miners, a friend told me about Hummingbird Resources, are they on anyone's Radar?

I've also had a few conversations with people a bit younger than me who will  missed the last crash in terms of being affected by it.  Most are turning 30 (i'm mid 30's) and pretty much all of them do not believe me that house prices go down or that its looking highly likely somethings about to hit a fan.

 

Great to see you here.Thats the sentiment you want to see.When everyone thinks something cant go down,it goes down.I have a chart somewhere that showed the attitude to debt from the Great Depression onwards.Just after the GD debt was hated.Those peoples children also werent happy with debt,having seen their parents suffer.The grandchildren started to fear debt less and their children didnt love or fear it.Now we are back where everyone thinks rates never go up,leverage never gets called in,a re-finance is always available etc etc.

If you can imagine a rubber band,every time you add a name to it you stretch it.There comes a point where the band simply wont stretch any more,and no more names can be added.The last few names are very hard to add,as its very hard to get the last bit of stretch.The snap back that follows is always fast and furious.The risk profile is now very much a band stretched at or close to the limit.Not if now,just when.

[Option5]

On the So-Called BBC now:

3:03

Wall Street facing miserable Monday

It's not looking good for Wall Street when the US starts trading later this afternoon.

Currently analysts are forecasting a 170 point drop for the Dow Jones leaving the US index lurking at its worst price since the end of May.

Spreadex analyst Connor Campbell warns the drop could hit investor sentiment on this side of the Alantic too.

"Whether these losses accelerate when the session gets underway will likely dictate the state of trading in Europe for the rest of the day, given the lack of data-distraction this Monday," he says.

https://www.bbc.co.uk/news/live/business-44574859

 

[TheCountOfNowhere]

1 hour ago, Gordie Lastchance said:

"No point in worrying when you're up to your neck in debt" - meaning they know there'll be every amount of assistance thrown at them if things go pear-shaped? Relaxed because they've no personal experience of the busts of the past? Or have they lost all sense of fear because debt's the only way to go?

Get the feeling from you, though, sentiment's changing, Count. 

No point in worrying as the are paid an arm and a leg and they think it'll all come good in the end.

The prospect of losing their job is not there, they dont see it happening, like a welsh coal miner in the 1950s.

Change of sentiment, that's what i've taken from it. I left feeling quite down/sad about the/their whole world.  

Just had a look on right move, 5 bed house very near then just dropped their price too 100K less than they paid 12 months ago.  Not such a good outlook but bigger with a HUGE garden and a pool.

I hope they dont look on rightmove very often

[Gordie Lastchance]

9 minutes ago, TheCountOfNowhere said:

No point in worrying as the are paid an arm and a leg and they think it'll all come good in the end.

The prospect of losing their job is not there, they dont see it happening, like a welsh coal miner in the 1950s.

Change of sentiment, that's what i've taken from it. I left feeling quite down/sad about the/their whole world.  

Just had a look on right move, 5 bed house very near then just dropped their price too 100K less than they paid 12 months ago.  Not such a good outlook but bigger with a HUGE garden and a pool.

I hope they dont look on rightmove very often

What makes you think they're so blind to it all? I'd assume you'd rate them as far from thick?

[No Duff (troll)]

1 hour ago, TheCountOfNowhere said:

They were talking about getting a cheap kitchen into their £1.2M house, as they were skint 

The cost of the kitchen is real, the value of the house is not.

[UnconventionalWisdom]

34 minutes ago, DurhamBorn said:

Thats the sentiment you want to see.When everyone thinks something cant go down,it goes down.I have a chart somewhere that showed the attitude to debt from the Great Depression onwards.Just after the GD debt was hated.Those peoples children also werent happy with debt,having seen their parents suffer.The grandchildren started to fear debt less and their children didnt love or fear it.Now we are back where everyone thinks rates never go up,leverage never gets called in,a re-finance is always available etc etc.

Minsky moment through and through. As much as people are basing their confidence in debt on the past 20-30 years, they don't go further back to see that there's other historical data going against their opinion of what will happen.

[A_P]

3 minutes ago, Gordie Lastchance said:

What makes you think they're so blind to it all? I'd assume you'd rate them as far from thick?

From my own experiance recently with friends, they can't and don't want to see what is right in front of them. No one likes the uncomfrotable truth. It's too painful and would rather take the view eveything will be alright.

[UnconventionalWisdom]

35 minutes ago, No Duff said:

The cost of the kitchen is real, the value of the house is not.

Again just anecdotal, but my boss moved into a half a million pound new build on the Surrey/Kent boarder-he said he saw loads of his neighbours with unfinished kitchens... Prob didn't realise they cost extra. 

[eek]

57 minutes ago, Gordie Lastchance said:

What makes you think they're so blind to it all? I'd assume you'd rate them as far from thick?

The cleverest people I know are also the thickest...

and it's not just uncomfortable truths - I think its more they can't see things outside their worldview and therefore don't see the bigger picture until its too late..

I am starting to think that 2018 = 1928....

[TheCountOfNowhere]

1 hour ago, No Duff said:

The cost of the kitchen is real, the value of the house is not.

Nail.....head

[TheCountOfNowhere]

1 hour ago, Gordie Lastchance said:

What makes you think they're so blind to it all? I'd assume you'd rate them as far from thick?

 They are a long way from thick.

They just dont see the day when they wont be working.  In this case I'd probably tend to agree, but they will be working a long time to pay off their debts when the London bubble goes

 

29 minutes ago, UnconventionalWisdom said:

Again just anecdotal, but my boss moved into a half a million pound new build on the Surrey/Kent boarder-he said he saw loads of his neighbours with unfinished kitchens... Prob didn't realise they cost extra. 

Did a few viewings in the west mids a few years back, prosperous areas, very nice houses....till you went through the front door.

 

 

[King Penda]

3 hours ago, TheCountOfNowhere said:

Went to see a friend of mine at the weekend who works for a large american bank ( in London ).

Word on the street is that everyone thinks it's the end of the world but they themselves think it's a storm in a tea cup.

No sign of any bank's in trouble ( they called the big french bank problems months before it went mainstream ).

However, there aint no jobs so everyone is trying to weather the storm !!!

One of the BBQ goers said her husband had been out of work 2 years with no sign of a job.  He's an "executive" and doesnt want to work in MacDonalds.

The words, divorce and throw the lazy c**t out, were used.  They will have to sell their property portfolio if the get divorced though ( a factor plenty of us would't have considered, as the 30 somethings in London who've piled into BTL/Debt hit that 10 years of unhappiness mark and decided enough is enough, plenty distress sales will appear, what's the divorce rate, 50% ? )

One person said, I kid you not, what's more important, you'r happiness or the shity flats you're losing money on.

My host, seems quite relaxed but the comment, "no point worrying when your up to your neck in debt" was quite revealing.  They were very happy that a house near them had gone under offer for 50% more than they paid last year though, last year they were telling me prices were down in that part of London, maybe they bought "the dip".  They were talking about getting a cheap kitchen into their £1.2M house, as they were skint 

Purely anecdotal and a small sample size but these are up beat city high flyer types who I've never heard a negative word from.

My friend looked old and tired suddenly.

 

 

and the above is why im quite happy just doing what i do,mind to be fair even i would not work at mcdonalds id end up twating someone.

[No Duff (troll)]

2 hours ago, eek said:

I am starting to think that 2018 = 1928....

I do, and before.  History may not repeat but sure rhymes.  The best economist is a historian.  Income (or rather wealth) inequality in particular.

[TheCountOfNowhere]

1 hour ago, stokiescum said:

and the above is why im quite happy just doing what i do,mind to be fair even i would not work at mcdonalds id end up twating someone.

There's a lot to be said for that.

The big money doesnt come without a lot of grief, a lot of hard work and a lot of pain.

Might seem great in your early thirties, but mid 40's, there's more to live that chasing the coin.

At the weekend after my "epic" bike ride ( see cycling thread ) I sat down feeling quite wrecked and my young child said to me, "dad, are you okay, can I get you a blanket".

That one moment was more precious than anything I could ever own or buy.

Debt is a great way though of getting people to chase "the dream".

[Gordie Lastchance]

1 hour ago, stokiescum said:

and the above is why im quite happy just doing what i do,mind to be fair even i would not work at mcdonalds id end up twating someone.

Only on DOSBODS! 

Seriously, the sheer honestly of folk on here is not only inspiring, but darned refreshing!!

[Gordie Lastchance]

2 hours ago, eek said:

The cleverest people I know are also the thickest...

and it's not just uncomfortable truths - I think its more they can't see things outside their worldview and therefore don't see the bigger picture until its too late..

I am starting to think that 2018 = 1928....

I've known a saying for years that has, thanks to the time I've spent on this planet, really been proven to be true on so many occasions.

It's this: "He/she's all brains and no common sense." Seems like it's ringing true with other posters on here.

But these people with all the brains and no common sense appear to be in all/most/many of the top positions in business/industry/politics. Where power lies.

It's frightening.