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Credit deflation and the reflation cycle to come.


DurhamBorn

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A little anecdote. Had a drink with a friend the other day whos a project manager for regeneration areas/social housing etc, very left leaning and you would think would have some idea in regards in financial and housing environments.

He obviously had heard of Carney’s house price crash brexit threat the other day, and as he’ll be looking to move next year with a kid on the way, stated that at least some good will come out of Brexit.

I explained that Brexit will be a piss in the ocean, compared to the global financial shitstorm thats coming and that Carney knows he’ll be in place now to see it unfold. The more he can shift the blame he will. My friend literally couldn’t fathom that the property markets look to have peaked around the major cities globally, and was insistent that Brexit will be to blame.

I then tried to show him overvalued FANG stocks like Amazon, and explained Fed is in QT mode, interest rates rising etc, but he glazed over. He even said how would I know better than Carney in regards to the financial climate (which was obviously an insult 😉).

So moral is, when stocks/housing do roll over, the MSM will spout whatever the TPTB narrative is and the masses will believe without question.

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1 hour ago, Yellow_Reduced_Sticker said:

GREAT FIND SP!

"Bricks and slaughter"   xDxDxD     LOVE it..!

It was Darkmarket's find.Props to them.I couldn't beleive what I heard from an MSM show,.

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3 minutes ago, Sideysid said:

So moral is, when stocks/housing do roll over, the MSM will spout whatever the TPTB narrative is and the masses will believe without question.

Exactly. So I'm weary of this Auzzie piece. There is no way a MSM outfit would put something like that out for the good of the people.

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The denial is strong with that one, SideySid...and after the GFC desperate people left Ireland for work in Oz, Canada and the like. 

My question is if we are crash now after all, Oz mining and housing leading the way based on this documentary/ exactly a repeat of Ireland RTE before the crash for sure/ where will people be able to go for work this time if Oz is tanking? 

5 minutes ago, sancho panza said:

It was Darkmarket's find.Props to them.I couldn't beleive what I heard from an MSM show,.

Yes the UK media has not been using the word Crash for a long time.

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10 hours ago, Agent ZigZag said:

Precious metals are redeemable in bullion bars at vaults, or in a selection of coins and bars that can be shipped to clients via Schiff Gold.

I have an account with them but never recalled the physical.

Fees are fairly reasonable and you can buy very close to spot. 

Yeah I thought as much. So not unexpected for Mr Bear/Broken Clock to be pumping gold. Not that I disagree with his line of thinking though xD

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58 minutes ago, Castlevania said:

The buy to letter in the second part is also in the first part, moaning that he’s been trying to sell a property for 18 months. Clearly asking too much.

As Jim the realtor always said.....it's unreal.On that basis,he could have sold for a profit last year-although I think he was Adelaide based so his invesments may have 

This will come to the UK in it's time.Obviously,variables matter and there are a lot.But the essence of fractional reserve lending is that it blows up on a regular basis because that's what happens when you allow volume driven bonuses in a sector where you're allowed to build houses on metaphorical sand.

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7 minutes ago, sancho panza said:

I wasn't expecting such an honest appraisal of the situation-to used to the UK MSM.When the liquidator said the 'only thing to do is sell while you can', I nearly choked on my horlicks.

 

7 minutes ago, Sideysid said:

So moral is, when stocks/housing do roll over, the MSM will spout whatever the TPTB narrative is and the masses will believe without question.

It is an interesting message and delivery, quite the turnaround. I wouldn't be surprised to see the same from the So-Called BBC though, the moral indignation is never slow to appear. There is absolutely no doubt they talk it up and then talk it down and there is no shame whatsoever about the hypocrisy. 

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7 minutes ago, Admiral Pepe said:

Yeah I thought as much. So not unexpected for Mr Bear/Broken Clock to be pumping gold. Not that I disagree with his line of thinking though xD

Whilst Schiff was right in 2006 he's had some expensive calls at other times.I wouldn't time off him.It's just interesting that he's gone into 2006 mode again.

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18 minutes ago, Thorn said:

Yes the UK media has not been using the word Crash for a long time.

So they and the glubberment can say with straight (as possible) faces that they never saw it coming.

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44 minutes ago, Sideysid said:

A little anecdote. Had a drink with a friend the other day whos a project manager for regeneration areas/social housing etc, very left leaning and you would think would have some idea in regards in financial and housing environments.

He obviously had heard of Carney’s house price crash brexit threat the other day, and as he’ll be looking to move next year with a kid on the way, stated that at least some good will come out of Brexit.

I explained that Brexit will be a piss in the ocean, compared to the global financial shitstorm thats coming and that Carney knows he’ll be in place now to see it unfold. The more he can shift the blame he will. My friend literally couldn’t fathom that the property markets look to have peaked around the major cities globally, and was insistent that Brexit will be to blame.

I then tried to show him overvalued FANG stocks like Amazon, and explained Fed is in QT mode, interest rates rising etc, but he glazed over. He even said how would I know better than Carney in regards to the financial climate (which was obviously an insult 😉).

So moral is, when stocks/housing do roll over, the MSM will spout whatever the TPTB narrative is and the masses will believe without question.

I was out for drinks with a couple of my friends over the weekend, most are quite well educated with good jobs but they haven't got a clue what's going on and what's coming other than what they see and hear in the media.  I usually keep my mouth shut but I got a bit tiddly and ended up having a rant about things, they all think I'm bonkers.  Time will tell.

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7 minutes ago, ILikeCake said:

I was out for drinks with a couple of my friends over the weekend, most are quite well educated with good jobs but they haven't got a clue what's going on and what's coming other than what they see and hear in the media.  I usually keep my mouth shut but I got a bit tiddly and ended up having a rant about things, they all think I'm bonkers.  Time will tell.

I don't say much to my friends as they all think I'm mental and should be wearing a tin foil hat, but then again this is the same ones up to there eyes in debt and driving around in rented £50k cars

 

Although it was refreshing to hear one of my friends that I don't see much, a little while ago whilst out drinking telling another friend he didn't need a leased van he has one paid for which he can do what he likes with and doesn't like monthly payments

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Just now, DoINeedOne said:

I don't say much to my friends as they all think I'm mental and should be wearing a tin foil hat, but then again this is the same ones up to there eyes in debt and driving around in rented £50k cars

Me too but I couldn't help myself.  My mates are the same, most with large mortgages.  I've still got a bit of post booze depression (I don't really drink much any more these days so when I do it takes it's toll) but it actually upsets me when I think about what's coming.  I think life is going to get a lot worse for a lot of people.

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1 hour ago, sancho panza said:

Agreed.Thanks so much for posting.I wasn't expecting such an honest appraisal of the situation-to used to the UK MSM.When the liquidator said the 'only thing to do is sell while you can', I nearly choked on my horlicks.

We've been discussing the debt deflation for a while. and this pretty much lays out the framework you need for one to occur.

Start with a banking system that creates credit via a balance sheet that sets assets(the loan) versus liabilities (current accounts/time deposits).

Loans start going sour or people pull cash out,hence banks draw in credit creation forcing prices of the main assets (let's remember 65% of Aussie banking assets are real estate loans) down which in turn forces banks to rein in credit creation leading to price decreases.

 

 

It's an old saying but markets move at the margins first.Whilst everyone has been getting carreid away with the US stock markets over the last year,most of the rest of the world has been lucky to stay flat.

I think the Aussie market is more exposed than the UK due to the fact they've had 26 years without a recession meaning that as Minsky would have argued stability has become inherently a lot more unstable than most of the rest of the world.

Remember as well what starts all of the above off.Tightening liquidity from the Fed.The macro seeds for this and whats ahead were starting to be sown two years ago.As soon as they tightened (and less /no QE was the start) like you say the margins start to go first.In the UK the margins are over leveraged retailers etc.The most pain moves to the areas that bubbled the most.Thats housing for a lot of places including the UK.Velocity has been at depression levels since the crash,and growth has been under trend all the way.As Keynes said long term growth under trend is a depression.Some of my gold miners have bounced 30%+ of their lows,interesting to see if they keep going.

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24 minutes ago, ILikeCake said:

Me too but I couldn't help myself.  My mates are the same, most with large mortgages.  I've still got a bit of post booze depression (I don't really drink much any more these days so when I do it takes it's toll) but it actually upsets me when I think about what's coming.  I think life is going to get a lot worse for a lot of people.

And a lot better for working people.

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1 minute ago, DurhamBorn said:

Remember as well what starts all of the above off.Tightening liquidity from the Fed.The macro seeds for this and whats ahead were starting to be sown two years ago.As soon as they tightened (and less /no QE was the start) like you say the margins start to go first.In the UK the margins are over leveraged retailers etc.The most pain moves to the areas that bubbled the most.Thats housing for a lot of places including the UK.Velocity has been at depression levels since the crash,and growth has been under trend all the way.As Keynes said long term growth under trend is a depression.Some of my gold miners have bounced 30%+ of their lows,interesting to see if they keep going.

I think the thing with Oz is that the longer a country goes without a recession,the more likely people are to leverage up to the maximum.A small rise in Oz rates, a small drop in hosue prices and all of a sudden something like 50% of remo applications are getting bounced.

It's the 'everything bubble' that's coming to dominate the thinking at the Fed.I think Jerome Powell can see it and I suspect that despite the noise to the contrary,trump can to.

Whatever he says publicly about the Fed and economics,the only thing I really watch and consider is what the effect will be on the Rust belt.Whatever is positive for the Rust belt is what trump wants.

We've had various discussions on here particularly including @Barnsey about Powell and the fact that a) he was a left field pick b) has no formal economic education (read neo classical) c) he was Trump's pick. The Fed has tightened despite all the other CB's squealing and hoping for more easing.Powell can see QE's not working as can Trump.Trump knows the 1% in NYC are powerless to reelect him,hence why he's not looking after them via QE (because they're the main beneficiaries-let's be frank)

Elites around the world must be getting worried.Which explains section 24 and Basel 3 in a way.

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1 hour ago, sancho panza said:

I think the thing with Oz is that the longer a country goes without a recession,the more likely people are to leverage up to the maximum.

Oz is completely bonkers. I've got a relative over who sells kitchens. Asked me to download a few episodes of 'The block' renovation show

People spending $50,000 on fridges, $8,000 on a tap etc. and it's all product placement stuff. He told me normal customers are paying that kind of money for these things

 

w

t

f

australia?

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6 hours ago, DurhamBorn said:

Remember as well what starts all of the above off.Tightening liquidity from the Fed.The macro seeds for this and whats ahead were starting to be sown two years ago.As soon as they tightened (and less /no QE was the start) like you say the margins start to go first.In the UK the margins are over leveraged retailers etc.The most pain moves to the areas that bubbled the most.Thats housing for a lot of places including the UK.Velocity has been at depression levels since the crash,and growth has been under trend all the way.As Keynes said long term growth under trend is a depression.Some of my gold miners have bounced 30%+ of their lows,interesting to see if they keep going.

 

Last week I stopped at a harvester type place for breakfast. The building was a new build, rather large and on a retail park type area next to a newly built Aldi store.

I had a rather nice breakfast for £3.99. Two rashers of bacon, generous portion of beans and mushrooms, two hash browns, back pudding, free range egg and grilled tomato. Unlimited tea/coffee and toast was included.

I was the only person in the place. There were at least 3 staff. When I left 30 minutes later I was still the only customer.

Maybe on weekends and evenings the place is rammed, but certainly for breakfasts they must be losing shedloads of cash.

So why do they do breakfasts?

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they tracked you on your phone and knew you were in the area, so quickly constructed a harvester and laid on a breakfast just on the off chance you fancied one.

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23 minutes ago, null; said:

 

Last week I stopped at a harvester type place for breakfast. The building was a new build, rather large and on a retail park type area next to a newly built Aldi store.

I had a rather nice breakfast for £3.99. Two rashers of bacon, generous portion of beans and mushrooms, two hash browns, back pudding, free range egg and grilled tomato. Unlimited tea/coffee and toast was included.

I was the only person in the place. There were at least 3 staff. When I left 30 minutes later I was still the only customer.

Maybe on weekends and evenings the place is rammed, but certainly for breakfasts they must be losing shedloads of cash.

So why do they do breakfasts?

Harvester have taken over the pub near me. It was just the same there on a morning but I've stopped having breakfasts (high cholesterol). They do a quiz on a Wednesday, it's a £20 gift card for 1st, £10 for 2nd and a bottle of wine for 3rd (priced more than £10 on their menu). Our team won again last week, there were four teams and the last team were given bags of sweets. There was hardly anybody else in except the quiz players. That's the good news, the bad is that my deferred pension is at Mitchells and Butlers.

 

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Yellow_Reduced_Sticker
9 hours ago, DurhamBorn said:

Il send one of Tesco's reduced sticker guns to the EA who does the local HTB estate.First take off 25%,then 50% and 3 hours before closing 75%.Anything unsold send to charity (local social housing).

^^xDxDxD

BTW, just checked countrywide share price, new LOW 11p ...HAS to be BUST?! HA-haxD

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Yellow_Reduced_Sticker
5 hours ago, afly said:

Oz is completely bonkers. I've got a relative over who sells kitchens. Asked me to download a few episodes of 'The block' renovation show

People spending $50,000 on fridges, $8,000 on a tap etc. and it's all product placement stuff. He told me normal customers are paying that kind of money for these things

 

w

t

f

australia?

Strewth...Ya having a laugh aren't ya?

My brother moved to S-Australia, about 15 years ago, he got EVERYTHING for his 3-bed detached house from gumtree NEVER spent more than $3K...tops, furniture the lot, hes a DIYer like me AND Oh yeah hes a LOT tighter than mexD

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2 hours ago, Stuffed said:

Staff maybe need the morning to prepare for busy lunch times, so may as well sell a few breakfasts rather than staying closed until later.

Yes, that was my thinking.

2 hours ago, leonardratso said:

they tracked you on your phone and knew you were in the area, so quickly constructed a harvester and laid on a breakfast just on the off chance you fancied one.

While unlikely, that's a far more entertaining explanation.

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40 minutes ago, null; said:

Yes, that was my thinking.

While unlikely, that's a far more entertaining explanation.

well, judging by how retail establishments are doing at the moment, then it fits the current retail paradigm perfectly, aka : picking up pennies in front of a steam roller.

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