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Credit deflation and the reflation cycle to come.


DurhamBorn

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4 hours ago, Banned said:

You have some strange idea people only buy houses with mortgages.

But seriously your claim that there is no difference is truly staggering, only a boomer could come up with it.

Quite clearly people ought to just fill their boots, the 2 generations of priced out dont know they were born as they didnt have 15% interest rates for a very short period of time. (you did have MIRAD also)

*THE* post on Then versus Now

Affordability backwards

https://ftalphaville.ft.com/2014/02/19/1776182/affordability-backwards/

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2 hours ago, DurhamBorn said:

Its interesting,but iv been phoned by an old employer today and offered a good job temporary.They will suffer hugely in the downturn.Iv also got a chance for a permanent job for a company that will do very well in the downturn and out the other side.Its less money,but still very good for the NE.Im actually quite tempted to take the 2nd one and put two years in.My mate is the boss,its 15 minutes from home,i can keep my business ticking over,gives me more time to position my portfolio and of course will mean dividends,business profits and wages can all flow into buying up assets later (my monthly all in living costs are only £410 a month).Iv pretty much retired,but i am really tempted to do it and i never thought id say that.

Bus driver vacancies.

Ive yet to find a better indication of UK labour market..

If the buses have 'Drivers wanted!' on them - and the website too  - then an area is facing v tight labour.

 

 

 

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26 minutes ago, spygirl said:

Bus driver vacancies.

Ive yet to find a better indication of UK labour market..

If the buses have 'Drivers wanted!' on them - and the website too  - then an area is facing v tight labour.

 

 

 

Its actually a company getting a lot of work sent from their US plants due to Trumps and Chinas tariffs ,they are going to produce the China orders in UK factories to avoid the tariffs and on top due to sterling being weak.Trump will find a lot of US companies will move work.20% off your currency and a 20% tariff elsewhere makes you very cheap all of a sudden.

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6 minutes ago, DurhamBorn said:

Its actually a company getting a lot of work sent from their US plants due to Trumps and Chinas tariffs ,they are going to produce the China orders in UK factories to avoid the tariffs and on top due to sterling being weak.Trump will find a lot of US companies will move work.20% off your currency and a 20% tariff elsewhere makes you very cheap all of a sudden.

Bus drivers is a good proxy for low to medum skilled people.

Pointless  lookign at not workig stats - these days they are full of the unemployable.

Huge snap back from the last 20 years of china gettign everything. Both icnrease i ncosts (wage costs up 20-30x) over last 20 years.

And now they are no a poor staving coutnry there's no preferential tretament. Tehy should have sort china out 10 years ago.

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3 hours ago, sancho panza said:

I did a portfolio for Mrs P a while back compounding at 6% p.a and she was surprised how the compounding can take lead to a trebling of the initial stake and a trebling of the divi income in 20 years.Anyhting you can do to add to the pot,speeds up the time to target.My main aim is to try and use our part time salaries to pay the bills and then reinvest the proceeds.

 

My attitude is that I will now work part time till I retire.I'm around your age too.I may go full time for a few years to max out my NHS pension if it's as I understand it.(Best 3 years out of your last 10).But I'm not that bothered.Life's too short and we live humbly quite happily.

 

Edit to add-not sure how long the Nhs pension will last.I wouldn't want to rely on it,or the state pension.

 

 

 

 

Your last point is the crux of the matter...in fact I think it was DB who spoke before about taking a DB pension early (and sacrificing a %) as a bird in the hand is worth two in the bush!

 

As for coming back to FT work and shunting anything £12k plus into a Sipp, I thought as well as a lifetime allowance there was a yearly allowance as well to stop people from doing this?

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Nicolas Turgeon
3 hours ago, DurhamBorn said:

@sancho panza i agree and although id pretty much retired im only 47 and almost everything i earn from the job will be available to invest.The job will not go away however big the downturn as you rightly said its job two id take on the slightly less money and see how long i want it.To be honest it was my partner who said i should take it.She said would you not rather have dividends and wages etc building up to buy cheap assets rather than be paying the bills with them?.Im not proud at all,and the fact is i think a generational opportunity is coming along very soon (and is already upon us in some areas,PMs etc).If i can bring in extra capital quickly to deploy into that then i owe it to my family to do it.It sounds crazy,but each extra £20k now i can deploy i see x 4 by the end of the next cycle.Il keep my business going and il SIPP everything over £12k probably.

I can see how it's tempting you DB! Extra cash now to invest for later when their are bargains everywhere. I'm not sure I could make the move from part-time self-employment (I'm inthe same boat as you there) to full-time under someone elses orders. I don't think I've got the spare time for that! And you can't muck a mate about due to loyalty... But maybe he would let you do it part-time instead?

Going back to PMs, we haven't had much discussion on companies like Eldorado Gold, Anglogold Ashanti, First Majestic Silver or Mirasol lately. Do any of these make it on to your lists of bounceback(rubberband)/good technicals shares?

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18 minutes ago, MrXxx said:

Your last point is the crux of the matter...in fact I think it was DB who spoke before about taking a DB pension early (and sacrificing a %) as a bird in the hand is worth two in the bush!

 

As for coming back to FT work and shunting anything £12k plus into a Sipp, I thought as well as a lifetime allowance there was a yearly allowance as well to stop people from doing this?

1

£40k annual allowance plus three years carry forward. To use the carry forward you need to be earning at least how much you intend to carry forward per annum eg to deposit £120k annual salary must be at least £120k

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So - here is a challenge for you lot.  We're going to be moving back to Australia, hopefully before the major collapse.  What HARD GOODS would you buy given we are in a low cost environment to ship back if you expect a major collapse within 3 years when the Aussie dollar will be toilet?  

 

Bear in mind we cannot transport:

GOLD

SILVER

AMMO

DRUGS

ALCOHOL

across borders without a lot of pain

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17 minutes ago, wherebee said:

So - here is a challenge for you lot.  We're going to be moving back to Australia, hopefully before the major collapse.  What HARD GOODS would you buy given we are in a low cost environment to ship back if you expect a major collapse within 3 years when the Aussie dollar will be toilet?  

 

Bear in mind we cannot transport:

GOLD

SILVER

AMMO

DRUGS

ALCOHOL

across borders without a lot of pain

Easy.

3 Stradivariuses.

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34 minutes ago, wherebee said:

So - here is a challenge for you lot.  We're going to be moving back to Australia, hopefully before the major collapse.  What HARD GOODS would you buy given we are in a low cost environment to ship back if you expect a major collapse within 3 years when the Aussie dollar will be toilet?  

 

Bear in mind we cannot transport:

GOLD

SILVER

AMMO

DRUGS

ALCOHOL

across borders without a lot of pain

Diamonds in a condom and swallow it. Sure be shit for giggles later.

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38 minutes ago, wherebee said:

So - here is a challenge for you lot.  We're going to be moving back to Australia, hopefully before the major collapse.  What HARD GOODS would you buy given we are in a low cost environment to ship back if you expect a major collapse within 3 years when the Aussie dollar will be toilet?  

 

Bear in mind we cannot transport:

GOLD

SILVER

AMMO

DRUGS

ALCOHOL

across borders without a lot of pain

Dress like Mr T.

 

138415583-1024x1024.jpg

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30 minutes ago, wherebee said:

So - here is a challenge for you lot.  We're going to be moving back to Australia, hopefully before the major collapse.  What HARD GOODS would you buy given we are in a low cost environment to ship back if you expect a major collapse within 3 years when the Aussie dollar will be toilet?  

 

Bear in mind we cannot transport:

GOLD

SILVER

AMMO

DRUGS

ALCOHOL

across borders without a lot of pain

BullionVault? Then just buy a few sovereigns for physical requirements

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1 hour ago, Nicolas Turgeon said:

I can see how it's tempting you DB! Extra cash now to invest for later when their are bargains everywhere. I'm not sure I could make the move from part-time self-employment (I'm inthe same boat as you there) to full-time under someone elses orders. I don't think I've got the spare time for that! And you can't muck a mate about due to loyalty... But maybe he would let you do it part-time instead?

Going back to PMs, we haven't had much discussion on companies like Eldorado Gold, Anglogold Ashanti, First Majestic Silver or Mirasol lately. Do any of these make it on to your lists of bounceback(rubberband)/good technicals shares?

I like all of them and own Eldorado,its up 10% today but im down 18% on it still though its made me very good money in the past.Nicely up on Sibanye again now though and Harmony doing very well.My no 1 rubber band stock was Harmony and its up 30% from its lows this month.Technical i like Yamana.Mirasol could multi bag,but its very risky.

I will find it very hard to move into work,but i think im going to.I dont need to and it will be simply to bank pretty much all the wages on top of my small business income.It will also help bring forward when my partner can retire.Shes brilliant and if i pay everything for a while she will be able to save pretty much all her earnings.Shes got a final salary council pension at 57,but i want her to be able to leave in 3 years at 52 (or at least jack in and work 16 hours somewhere less stressful).I am thinking maybe putting 2 years in at most.

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1 hour ago, Admiral Pepe said:

£40k annual allowance plus three years carry forward. To use the carry forward you need to be earning at least how much you intend to carry forward per annum eg to deposit £120k annual salary must be at least £120k

The carry forward only applies if you were a member of a registered pension scheme during those specific tax years.

I.e. you cannot apply to be a member of a scheme this year and apply the carry forward rule / s for the last 3 years.

Employers can make a contribution for past tax years also, if applicable.

 

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5 hours ago, Thorn said:

Talking about factory plant and Pension Pot... anybody following Tilray, the marijuana people?

Very illiquid.  Doesn't look sustainable.

[But not the industry -- there is enormous growth potential.  Just that Tilray is odd right now.  Don't know why.]

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Talking Monkey
19 hours ago, dgul said:

Yes.  You're paying £1,000 a month (or whatever you can afford) in both scenarios.  Of course, inflation plays a significant part over the longer term, but that's irrelevant if you can't buy the cheap house in the first place because you can't afford the high-interest rates on the loan.

Sure, if you can pay a decent amount of cash, then you're quids in -- but the quote was neither will people looking to buy a house with wages.  The average housebuyer with a 15% deposit (that is a 10% deposit now) won't (IMO) see a lovely land of housing costs of a tiny fraction of their earnings. 

The best position of all will be in buying houses (or flats) that are difficult to mortgage and with a motivated seller (inc repossessions) for cash -- the prices of these will go down the most.  It might take a while to reach rock-bottom though; those with cash will move in to get the 'bargains' from the start (BTFD).  Trouble for them is, the prices will keep on going down (in real terms) -- IMO we've got a 25 year bear market in housing ahead.

Interesting view that, a correction is coming and most likely a big one, that will take a few years to bottom out, though I never thought 25 years, why so long in your opinion

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5 minutes ago, Talking Monkey said:

Interesting view that, a correction is coming and most likely a big one, that will take a few years to bottom out, though I never thought 25 years, why so long in your opinion

We've had decades of rises with the occasional blip down -- why not the same in reverse?

[but note -- in real terms.  It might appear to be drifting sideways]

Eg, this is Japan (note inflation adjusted, but Japan hasn't seen big inflation so the drop hasn't been masked by inflation):

Japan-residential-urban-land-price-index

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Talking Monkey
7 hours ago, sancho panza said:

repayment-mortgage-graph2.gif

I think it's the best way to do mortgages.Get yourself through the point where repayment component is higher than interest.

This is the Shaun Richards thesis.

The irony being that 'Core CPI' excludes most the things things you actually need to live like food,roof over your head and fuel.

Some good pearls in there if I may say.One of the key things to remember is that as the fractional reserve system contracts,the banks will not be as free with credit,so it will indeed be harder for the working person with no real savings to buy.

I've got my job going part time DB,to help with the kids and to allow me more time with our pension pot.I expect to be shorting vigorously,this time next year unless something catastrophic happens before then.This is a once in a lifetime opportunity coming in many ways.

I'm full time at the mo ,hence my disappearance from this fine thread for days at a time sometimes.Part time,clear your bills.It's a nice position to be in.

Working 15 mins from home sounds great.I'd go for the second one.

 

I would have thought we'd be at that point much sooner than this time next year SP

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10 hours ago, dgul said:

[* I know there are many savers here, but this isn't normal -- most people will buy a fancy new car at £300 a month rather than a basic older car at £50 (etc), saving the rest.  It is, though, an inevitable position -- you can only get the bust by most people being completely committed to the high debt, low interest rate environment.]

My car is so crap someone gave it too me for FREE.. :D

I'm waiting for the day when my kids start refusing lifts home from school..

Id rather go on holiday than spend money on stuff.. Although I am a little addicted to old cars and motorbikes but I buy them not working and fix them so I normally make a profit!

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45 minutes ago, Talking Monkey said:

I would have thought we'd be at that point much sooner than this time next year SP

I agree. As much as they've kept the plates spinning for the last few years, I just can't see another 12 months in this bull market. Too many chickens coming home to roost at once. I'd be surprised if there was as much as 6 months left, to be honest. It could be as early as next month when it all kicks off...

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1 hour ago, Talking Monkey said:

Interesting view that, a correction is coming and most likely a big one, that will take a few years to bottom out, though I never thought 25 years, why so long in your opinion

?Japan.

Bear market 28 years and counting.

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