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Credit deflation and the reflation cycle to come.


DurhamBorn

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6 minutes ago, UnconventionalWisdom said:

I'm early 30s and have well-educated mates who are still sharing a house in their 30s. I knew a surgeon who was sharing into his 30s (I think he is now living with his misses). I cant understand why they accept it and aren't angry. I keep on telling them about the monetary policy that the gov and BOE pursue are the issue...but they don't seem to be interested. I really fear that TPTB are pushing to see where people's breaking point is and will push until that's been reached. 

It does seem that young adults are more and more infantilized these days and many of us are willing to behave like it. I have friends who are still at home at 35. That's middle-age territory

 

 

 

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1 hour ago, DurhamBorn said:

Like @sancho panza says being skint is my biggest fear.Iv had cancer,relationship breakups ,redundancy you name it and faced all those down easily,skint is far worse.When i was 12 to 14 id say where i lived in the north suffered an economic depression maybe as bad as the Great Depression.In my town and most northern towns nearly ALL the jobs went as they closed almost all our industry.I can remember seeing a guy leaning against the wall in our back alley.He was one of the toughest blokes i knew.He would put on the floor half a dozen fellas without blinking.Lovely bloke though and always stuck an embassy cigarette behind my ear if i was sat on the back step as they walked home from the factory.This day it was raining and i could hear him crying like a baby.I never went out the gate,he didnt know i was there.He pulled himself together and walked off.The reason he was crying was because he hadnt been able to get any work and couldnt take a wage home to his wife .Seems he used to walk the alleys as if he was walking from work that was now just an empty site.Industry closing broke him and almost everyone else.I used to see him simply walking his dog around the park.One night i saw his wife snogging another bloke behind a tree.She wasnt like that,a lovely woman and they stayed married until he died,but i guess she needed an escape too.That was a lesson il never forget.The government lie to you,the elite will screw you over in a blink.You have to protect yourself as best you can.Question everything you are told.Understand capital.I fear a new generation are about to be that bloke,and they might get it even worse as they are so used to getting more.

+1 as out of reps for today.

Despite being down south where we are all rich and drive range rovers, I grew up in a poor family. Second hand clothes/toys and no food in the fridge were common. I believe those childhood experiences are what gave me the drive to have a better life for myself and my children. It's why I gave up a huge chunk of my life working and studying to further my career.

Unfortuntely, I got there around 10 years too late and felt the rug had been pulled out from under me. I still feel driven, but given the current situation I resent the benefits of my labour going to the government and/or greedy bosses who exploit their staff.

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Being broke / skint is horrible its weird as I was thinking about that today went to the post office to post something which was on a local council estate and sometimes I stop off at the cafe there as I did today I can't help but sit there staring out the window at the betting shop

Every council estate near me seems to have huge betting shops (we know why), now I'm not judging anyone but it's amazing to watch people go in sometimes after coming out of the post office straight into the betting shop and them bloody roulette machines

But then thought when I was broke left home and eating cheese and bread everyday whilst sleeping on sofas or in my car luckily not outside

where was my frame of mind I remember thinking of 101 ways to try make some money then I had lost my car (repossessed)  and then could get to work so lost my job too then everything goes 100 miles per hour getting worse

So whilst sitting there looking at this betting shop I thought they are just looking for a quick fix, quick gains just like when we buy that lottery ticket "what if I win" which normally ends the same way either £1 down or more 

You're always going have people who are shit with money and those that some may consider tight but at the same time it should be easier to get a job and earn a good days pay people just want to get on and enjoy their lives

My dad used to tell me stories about losing a job walking down the road onto another site and getting a new job, but the world we live in today is not like that no more and in my honest opinion it's going get a lot worse for a lot of people and it scares me

Thankfully in a better position today and thanks to this thread I've been diversifying and investing in different things and some would say betting just like those in the betting shop but on crypto

We're all just trying to survive and sometimes it can all become too much

One thing I'm glad of though is the experience of going through being broke I feel it made me stronger and better with money because I never want to go back there

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reformed nice guy
18 minutes ago, UnconventionalWisdom said:

I'm early 30s and have well-educated mates who are still sharing a house in their 30s. I knew a surgeon who was sharing into his 30s (I think he is now living with his misses).

I have a few friends that are doctors and this is fairly common - house sharing, spending all their money on holidays and expensively eating out each week. Could be due to them feeling that they are 'set' for life

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39 minutes ago, null; said:

+1 as out of reps for today.

Despite being down south where we are all rich and drive range rovers, I grew up in a poor family. Second hand clothes/toys and no food in the fridge were common.

That wasnt poor for someone born in the 60s/70s that was normal .. who needed toys when a couple of footballs and a BMX could last best part of an entire childhood.

 

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1 minute ago, Banned said:

That wasnt poor for someone born in the 60s/70s that was normal.

 

 

It was certainly common, but those with Dads who held down a regular job did ok and in our street I would say around 80% were doing ok.

Compare that with what is defined as poverty today....

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8 minutes ago, null; said:

It was certainly common, but those with Dads who held down a regular job did ok and in our street I would say around 80% were doing ok.

Compare that with what is defined as poverty today....

Yes the poorest people are often the fattest (and can afford tattoos), 21st century poverty.

My kid has everything material wise, goes to restaurants maybe a couple of times a month, goes on exotic holidays (though she does not have settled accommodation) ... but i'd still rather my relatively skint childhood where we had freedom and didnt need all the shite kids have today.

 My dad did worked in shipyards apart from a couple of years after they shut down in the late 80s, so not claiming to have had a childhood of destitute, but the cupboards being empty was the norm in the days running up to shopping day or if the weekly shop got cut in half.

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2 hours ago, Democorruptcy said:

I don't believe it!

If being skint was your biggest fear you wouldn't have been working part time for so long and only half considering the job offer you mentioned this week. You would be in all out accumulate mode not quality of life mode.

I wont ever be skint from here in.Iv enough to last me the rest of my life unless i suffer a huge capital hit.The fear of being skint was from 14 until id made enough to pay for the basics forever.Once id paid my mortgage off and investments  to give me £12k a year from the income minimum i moved to quality of life mode.Im considering moving to accumulate mode for a few more years simply to give me more options,and mostly so my partner can retire soon as well.It also gives me longer to structure my portfolio without any risk of taking anything from it.

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Is there gold tracker you can buy in europe? I used to buy gdx and gold but they're unavailable now thanks to the EU.

I bought a bit of black rock gold fund today as its all I could find on HL. 

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3 minutes ago, Green Devil said:

Is there gold tracker you can buy in europe? I used to buy gdx and gold but they're unavailable now thanks to the EU.

I bought a bit of black rock gold fund today as its all I could find on HL. 

SGLN

PHGP

SPGP

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this is it really, reminds of a twilight zone episode i watched ages ago if i remember correctly(not guaranteed), now the story was about after death. 1 bloke died and went to a place, think it was a beach or something, not important really, there was already another bloke there who had died previously. Anyways as the story went on it transpired that 1 bloke was good all his life, never sinned, the other was bad and sinned a plenty. Anyways the upshot was that 1 loved it there and the other hated it, hence for 1 it was heaven, for the other it was hell. Its a sort of analogy for life i suppose, to some people quality of life is taking it easy, modest life, every thing in reason covered until the end. For others its the opposite, working and earning and being part of a team with various challenges and maybe even a frontier to push. Each to their own i suppose.

Nowt wrong with just stacking it up , even if its just for the ones left behind once you croak.

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21 minutes ago, leonardratso said:

this is it really, reminds of a twilight zone episode i watched ages ago if i remember correctly(not guaranteed), now the story was about after death. 1 bloke died and went to a place, think it was a beach or something, not important really, there was already another bloke there who had died previously. Anyways as the story went on it transpired that 1 bloke was good all his life, never sinned, the other was bad and sinned a plenty. Anyways the upshot was that 1 loved it there and the other hated it, hence for 1 it was heaven, for the other it was hell. Its a sort of analogy for life i suppose, to some people quality of life is taking it easy, modest life, every thing in reason covered until the end. For others its the opposite, working and earning and being part of a team with various challenges and maybe even a frontier to push. Each to their own i suppose.

Nowt wrong with just stacking it up , even if its just for the ones left behind once you croak.

Interesting for sure.

I am convinced life is all about your attitude to responsibility.

love it, myself.

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14 hours ago, Funn3r said:

It does colour your thinking. I grew up in financial poverty although most other things in my childhood were really good. All my life I have been frugal/saving and even though I am now relatively well off in comparison I still have to stop myself thinking no I can't justify spending money on that (something I actually need or want.) 

Agree with this and those sentiments of DB and Harp.

I think the issue is that if you experienced this in your formative years frugality becomes ingrained; just look at this behaviour being reflected by the people on here and their yellow sticker shopping.

Then one day you experience a wake up call (either directly or indirectly). This gets you to address or look at your situation and realize that you have enough for your own needs/security/meagre lifestyle, and you don't have to keep on working/worry about having enough. This is when you consider early retirement...it still doesn't mean that those ingrained, learnt behaviours are not still in the background and will never appear again...they are you.

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13 hours ago, DurhamBorn said:

I wont ever be skint from here in.Iv enough to last me the rest of my life unless i suffer a huge capital hit.The fear of being skint was from 14 until id made enough to pay for the basics forever.Once id paid my mortgage off and investments  to give me £12k a year from the income minimum i moved to quality of life mode.Im considering moving to accumulate mode for a few more years simply to give me more options,and mostly so my partner can retire soon as well.It also gives me longer to structure my portfolio without any risk of taking anything from it.

It was a my biggest fear 'is' not 'was' so I was just thinking you can recover from being skint but there are a lot of worse things that could happen to you or loved ones, that are permanent. I bet you would spend all you have to pay for something life saving for your children, so willingly go skint, then you would make some more money. I'm from a very poor background, my parents worked down t'mill. I've been skint before and might be skint again but something will turn up.

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5 minutes ago, Democorruptcy said:

It was a my biggest fear 'is' not 'was' so I was just thinking you can recover from being skint but there are a lot of worse things that could happen to you or loved ones, that are permanent. I bet you would spend all you have to pay for something life saving for your children, so willingly go skint, then you would make some more money. I'm from a very poor background, my parents worked down t'mill. I've been skint before and might be skint again but something will turn up.

Well yes,and thats part of the fear of been skint,being unable to help family or have options to deal with things.When i had cancer at 30 i took 5 years off working and that was because i could afford it,but did run my money down some in that time.I think had i been skint then and had to return to work etc id of been dead.I agree something will turn up always,but i like 10 years comfort zone in case it takes its time xD

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Super basic question for you guys. Can I open and pay into more than one SIPP in a financial year? 

I have absolutely zero idea why I can only have one ISA/S&S ISA per year so wondering if SIPP is the same?

Asking because cavendish/fidelity is proving  a bit shitola with its available funds (only funds). I'm not really interested in transferring the SIPP, just want to open a new one

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2 minutes ago, afly said:

Super basic question for you guys. Can I open and pay into more than one SIPP in a financial year? 

I have absolutely zero idea why I can only have one ISA/S&S ISA per year so wondering if SIPP is the same?

Asking because cavendish/fidelity is proving  a bit shitola with its available funds (only funds). I'm not really interested in transferring the SIPP, just want to open a new one

4

Well you can pay into one of each kind of ISA a year up to the max. So do have options to split that £20k allowance. In my case, I split it between a S & S ISA and a LISA.

I don't think there is a restriction on how many SIPP's/Pensions you can open/contribute per year. The one thing to consider would be the costs though. SIPP's come with pretty hefty admin costs and charges. Depending on your amounts, what you intend to invest in and what stage of investing/drawdown it can have a big impact.

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Just now, Admiral Pepe said:

Well you can pay into one of each kind of ISA a year up to the max. So do have options to split that £20k allowance. In my case, I split it between a S & S ISA and a LISA.

I don't think there is a restriction on how many SIPP's/Pensions you can open/contribute per year. The one thing to consider would be the costs though. SIPP's come with pretty hefty admin costs and charges. Depending on your amounts, what you intend to invest in and what stage of investing/drawdown it can have a big impact.

Thanks AP

Yes I'm looking at HL and can see a £10'ish trade cost + 0.45% charge. But having opened and never funded a LISA with them, I can see that the platform and range of investments is far better than what I have at the moment. I can't even track how my investments have performed with fidelity.  I'm hoping to get my biz to make regular contributions of about 1k a month so I would prefer to have the options and support available if poss. Maybe I'll give them a call to set up rather than doing it online so I can be sure it's all by the book

 

 

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On 19/09/2018 at 13:55, 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.

 

Ahh a traditional repayment mortgage chart! Not seen one of those in the UK  since before endowments. Welcome back!

I got a 10 year HSBC mortgage, 5 year fix @ 1.5%, . ~40% LTV no fees. Its inane - all Chinese funded money.

Its also kicking around the smallest mortgage theyll do - about 60k.

Im overpaying  an extra 300/m too.

And chucked some maturing cash at it - about 10k/year repayment, 10k cash.

In 2 years the mortgage has now halved. Last time I looked the debt was costing me ~50/m which IM OK with. The rmonthly repayments are 800/m.

 

 

 

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19 hours ago, null; said:

+1 as out of reps for today.

Despite being down south where we are all rich and drive range rovers, I grew up in a poor family. Second hand clothes/toys and no food in the fridge were common. I believe those childhood experiences are what gave me the drive to have a better life for myself and my children. It's why I gave up a huge chunk of my life working and studying to further my career.

Unfortuntely, I got there around 10 years too late and felt the rug had been pulled out from under me. I still feel driven, but given the current situation I resent the benefits of my labour going to the government and/or greedy bosses who exploit their staff.

I grew up near Durham.

I remember the second half of the 70s - people were earning really good money. I had an Uncle in Wakefield. By the late 70s miners were probaly in the top 10% of UK earners. Then they had Spanish holidays where people flew over  to  what was then a 3rd world country and lived it up on pennies - Could not give your money aywas. It why all those straw donkeys came back - they used to woven by poor Spanish people and people where buying them just to get shot of the currency they had - capital controls n all.

People used to get jealous over Easter elvers as they could start earning ~4 months ahead of everyone else - they have a car by summer.

Then the wheels fell off. Some of it was Thatcher, some of it was high pound due to North sea oil, some of it was removal of capital control and the opening okf the UK economy. But the change was brutal in the North.

I went from haivng a well paying job lind up at 12ish to loosing my1 st 2nd and 3rd choice beore Id even left school There were no jobs around.

However .... if it was not for low IRs keeping the whole show going and tax credits , the changes since 2007 in the South would be much worse.

Al lthe well paying jobs below Sheffield were connected to Fin services. I go to towns where 20 year ago about 40% worked at various finsec companies. 90% of these jobs have gone.

As tax credits are removed and IR go up you are going to see a huge shortfall between southern living costs and southern wages.

 

 

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15 minutes ago, spygirl said:

Ahh a traditional repayment mortgage chart! Not seen one of those in the UK  since before endowments. Welcome back!

I got a 10 year HSBC mortgage, 5 year fix @ 1.5%, . ~40% LTV no fees. Its inane - all Chinese funded money.

Its also kicking around the smallest mortgage theyll do - about 60k.

Im overpaying  an extra 300/m too.

And chucked some maturing cash at it - about 10k/year repayment, 10k cash.

In 2 years the mortgage has now halved. Last time I looked the debt was costing me ~50/m which IM OK with. The rmonthly repayments are 800/m.

Just to throw the other side of the equation -- if you've already go the place and finance and we're heading into a debt deflation, perhaps you're better off fixing for as long as possible and not paying off any more than you have to?  I'd presume that where we're going it'll become increasingly hard to get hold of debt; if you keep hold of the cash you would otherwise be overspending, you'll have capital to invest in a market crash.  The cost of holding that cash is max 1.5% which is about as cheap a financing as you could imagine.  And if it doesn't work out you could always just overpay at a later point.

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2 minutes ago, dgul said:

Just to throw the other side of the equation -- if you've already go the place and finance and we're heading into a debt deflation, perhaps you're better off fixing for as long as possible and not paying off any more than you have to?  I'd presume that where we're going it'll become increasingly hard to get hold of debt; if you keep hold of the cash you would otherwise be overspending, you'll have capital to invest in a market crash.  The cost of holding that cash is max 1.5% which is about as cheap a financing as you could imagine.  And if it doesn't work out you could always just overpay at a later point.

Im not 100% sold debt deflation.

Im guessing that mortgage debt is going to be hard to come by.

Reducing the debt was just a hedge.

 

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1 hour ago, dgul said:

Just to throw the other side of the equation -- if you've already go the place and finance and we're heading into a debt deflation, perhaps you're better off fixing for as long as possible and not paying off any more than you have to?  I'd presume that where we're going it'll become increasingly hard to get hold of debt; if you keep hold of the cash you would otherwise be overspending, you'll have capital to invest in a market crash.  The cost of holding that cash is max 1.5% which is about as cheap a financing as you could imagine.  And if it doesn't work out you could always just overpay at a later point.

I have thought about that, but think there is a real risk of bail ins, so if you are holding money in the bank ready to take advantage of the crash to buy cheap assets, you could lose a proportion to the gvt.  If you have paid off a chunk of your mortgage, I don't see a situation where they make you take it back out again...

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22 hours ago, Green Devil said:

Is there gold tracker you can buy in europe? I used to buy gdx and gold but they're unavailable now thanks to the EU.

I bought a bit of black rock gold fund today as its all I could find on HL. 

I’ve used the iShares Physical Gold fund (SGLN) that @Admiral Pepequoted below. Super cheap. My only issue is that it’s so liquid is that I’ve always tapped it when I have something more exciting to invest in. So yeah, I prefer to own physical with all the extra costs, because it’s a right hassle to sell.

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