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IGNORED

Credit deflation and the reflation cycle to come.


DurhamBorn

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3 hours ago, Ash4781b said:

The much discussed Intu Plc share price looks very depressed. 

Try looking at Capita's.......

53 minutes ago, Sideysid said:

I’m gonner need a source on that Errol, preferably not Sputnik based.

It says Sober Look on the graph.Very relaible source normally

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Inoperational Bumblebee
5 hours ago, Calcutta said:

It was mentioned a few pages back about the Pound being seen as a safe haven when things start kicking off. Any thoughts anyone on what/if/when how that could materialize?

It's always seemed likely to me that Sterling would rebound again, at least at some point in the future. Our government was the most 'successful' at debasing it's currency during the GFC, and there's plenty of 'shitholes' around the World in much poorer shape than ours.

While I'm asking silly questions, any ideas on investing in Venezuela? Right now it looks mental buy what an opportunity once there's been a touch of regime change.

I think I'd spread myself between USD , JPY, CHF and CAD if I was choosing safe haven currencies. The shower of shit in charge at the moment are not filling me with confidence that the currency markets won't realise the country is on the road to ruin.

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8 hours ago, sancho panza said:

Try looking at Capita's.......

It says Sober Look on the graph.Very relaible source normally

Yup my mistake, only briefly looked last night, misread it as tonnage not percent. 

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11 hours ago, Errol said:

DzJv_CHW0AANxBj.jpg

Percentage change in gold reserves 2010-2019. Russia's winning. China's opaque. The world is starting to wake-up. The U.S. is sound asleep.

The US already has the largest declared reserves, if they tried doing a 200% increase like Russia they would have to buy up most of the worlds production for several years.  Not going to happen in short.

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UnconventionalWisdom
48 minutes ago, Majorpain said:

The US already has the largest declared reserves, if they tried doing a 200% increase like Russia they would have to buy up most of the worlds production for several years.  Not going to happen in short.

Someone asked him about the total values. 

It's interesting how low gold is as a uk's percentage of reserves. I think the BoE sold a load a few years ago but this is shocking compared to US or Germany. 

 

 

DzN3mo6WoAAgzeD.jpeg

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11 hours ago, Lavalas said:

Been nice to see New Golds resurgence on good volume. Year end financial results and 2019 guidance out on Thursday.

Yes, it's been going up very nicely in the buildup to Thursday. It's not just about financial results, but (more importantly imho) about 2019 guidance. I think markets are waking up to the possibility that Rainy River has turned the corner.

Last but not least, copper has been rising this year and it's copper production at Afton that kept NGD alive in 2018.

I decided to close my position in HMY yesterday and reinvested in WDO and NGD for the short term. NGD financials+guidance tomorrow, WDO financials+Kiena update on the 21st and then they both present on PDAC in early March.

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Eventually Right

After Powell capitulated on rate rises last month, looks like the Fed are going to stop reducing their balance sheet as well:

https://www.channelnewsasia.com/news/business/fed-to-finalize-plans-to-end-balance-sheet-runoff--at-coming-meetings---mester-11236886

To do a complete 180 in such a short period of time, you get the feeling they can see what's coming in the world economy, and it scares them.

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5 hours ago, UnconventionalWisdom said:

Someone asked him about the total values. 

It's interesting how low gold is as a uk's percentage of reserves. I think the BoE sold a load a few years ago but this is shocking compared to US or Germany. 

 

 

DzN3mo6WoAAgzeD.jpeg

But we're 2% ahead of the Solomon islands.

Chaa.

2 hours ago, Barnsey said:

OUCH! Eurozone Industrial Production -4.2% Y/Y, biggest drop since 2009...

.Untitled.jpg.587db72f34b319614e5720c9c6cb0e72.jpg

 

You're  doommonger barnsey.

 

If you turn the chart the other way,it looks great.

17 minutes ago, Eventually Right said:

After Powell capitulated on rate rises last month, looks like the Fed are going to stop reducing their balance sheet as well:

https://www.channelnewsasia.com/news/business/fed-to-finalize-plans-to-end-balance-sheet-runoff--at-coming-meetings---mester-11236886

To do a complete 180 in such a short period of time, you get the feeling they can see what's coming in the world economy, and it scares them.

They raised rates because they were worreid.I think they're jsut picking which bit of the wave they pile into.

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2 hours ago, Eventually Right said:

After Powell capitulated on rate rises last month, looks like the Fed are going to stop reducing their balance sheet as well:

https://www.channelnewsasia.com/news/business/fed-to-finalize-plans-to-end-balance-sheet-runoff--at-coming-meetings---mester-11236886

To do a complete 180 in such a short period of time, you get the feeling they can see what's coming in the world economy, and it scares them.

We saw them doing that 23 months ago.You could say they have caught up,but they havent,they are still 23 months behind.If inflation picks up around May in the US as we expect,they will be in a trap,thats when gold should really start to trend higher.

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4 hours ago, Barnsey said:

OUCH! Eurozone Industrial Production -4.2% Y/Y, biggest drop since 2009...

.Untitled.jpg.587db72f34b319614e5720c9c6cb0e72.jpg

 

Soon it will be since the late 20s/early 30s.All the ducks are lining up now.Inflation is in the system,but a credit deflation is masking it.Its very hard to timeline the moves,but i fully expect from here until 2027/28 PMs and inflation loving assets will far outperform houses,broad equity markets etc.I think Powell might give lip service to a potential pause in rate hikes.That doesn't mean the end of tightening. Will continue to shrink balance sheet & rate hikes will be back on the table if inflation moves up in May.Ultimately the Fed will trigger a global deflationary bust and the likely worst bear market in the post WWII era (US market).

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Yellow_Reduced_Sticker

"House price growth falls to lowest level in five years"

https://uk.finance.yahoo.com/news/house-price-growth-falls-lowest-level-five-years-100925634.html

Official figures from the Office for National Statistics (ONS) show Growth in the UK property market has fallen to a five-year low, with homes edging up just 2.5% in value over the past year. 

FFS...I was expecting a - MINUS figure!:Old:

When IS this CRASH coming ? MARCH 29th 2019 ?

When this housing CRASH finally arrives ...this financial fraud with all the goverbankment props... will make Madoff look like a well intentioned amateur!

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6 minutes ago, StrugglingMillennial said:

Do you think gold will have a steady climb and then stay there?

No idea,my roadmap says $1340 down to $1250 up to $1500+ down below $1000 and then trending to $5000/$8000 by 2028.The destination is what counts though because the roadmap short term contains lots of short term cycle work and sentiment,,the roadmap long term contains mostly macro/liquidity work and long term cycles.These roadmaps are not trading calls,its the 100% lesson of them,NOT trading calls.They are for long term positioning.In the broadest terms id hold some now.Id sell perhaps 20%/30% if gold hits $1500,if it then did go below $1000 id reinvest that 30% back in and then sit back and let the cycle unfold.Thats my personal opinion,not investment advice.

Im still pretty convinced the cycle will be a reflation and im also convinced hardly anyone is invested for that.A distribution cycle alongside a reflation cycle will be very painful for people in cash,leveraged houses and a lot of sectors of the economy.

 

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StrugglingMillennial

So if you have cash whats the best options to move into.

I know its all if buts and maybes but i have a fair amount in cash, some in gold and silver but i dont feel the time is right to move some back into shares.

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21 minutes ago, DurhamBorn said:

Soon it will be since the late 20s/early 30s.All the ducks are lining up now.Inflation is in the system,but a credit deflation is masking it.Its very hard to timeline the moves,but i fully expect from here until 2027/28 PMs and inflation loving assets will far outperform houses,broad equity markets etc.I think Powell might give lip service to a potential pause in rate hikes.That doesn't mean the end of tightening. Will continue to shrink balance sheet & rate hikes will be back on the table if inflation moves up in May.Ultimately the Fed will trigger a global deflationary bust and the likely worst bear market in the post WWII era (US market).

I have to admit I don't see where that inflation would originate from.

I understand the concept od delationary bust causing CBs to overreact and unleash direct govt spending, triggering inflationary run. However, you seem to indicate that inflation will arrive first (or is already there) and that will encourage further tightening, prompting a bust and a subsequent overraction. Where would that original inflation come from?

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8 hours ago, UnconventionalWisdom said:

Someone asked him about the total values. 

It's interesting how low gold is as a uk's percentage of reserves. I think the BoE sold a load a few years ago but this is shocking compared to US or Germany. 

 

 

DzN3mo6WoAAgzeD.jpeg

Well I can see how Italy could bail itself out quite easily if gold prices climb.. Debt what debt.. 

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Just now, kibuc said:

I have to admit I don't see where that inflation would originate from.

I understand the concept od delationary bust causing CBs to overreact and unleash direct govt spending, triggering inflationary run. However, you seem to indicate that inflation will arrive first (or is already there) and that will encourage further tightening, prompting a bust and a subsequent overraction. Where would that original inflation come from?

In the US a falling dollar probably,its only a spike though,the economy could see outright deflation before too long.The key is it might mean the Fed continue to tighten,even if they indicate they are moving to loose.Longer picture is inflation all the way of course and thats what really counts.I doubt anything can stop that now.

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UnconventionalWisdom

Interesting article on recessions and how the next one won't be like the past. Not much new to the thoughts expressed here. Pretty obvious but debt can't expand forever. 

https://oftwominds.cloudhostedresources.com/?ref=https%3A%2F%2Fgoldsilver.com%2Findustry-news%2F&url=https%3A%2F%2Fwww.oftwominds.com%2Fblogfeb19%2Fsell-everything2-19.html&width=360

No longer content with blowing one credit-speculative bubble at a time, central bankers coordinated their efforts in 2009-2018 and inflated the Everything Bubble. But the Everything Bubble didn't resolve or even address the multiple structural imbalances in the U.S. and global economies; it merely papered them over with a triple-whammy credit-speculative orgy of unprecedented enormity.

Unlike the 1970s, 80s, 90s and 2000s, wages (earned income) did not rise for the bottom 90% during the Central Bank Everything Bubble 2009-2018: it isn't just the stock buybacks and other financier speculations that are funded by debt--a great deal of consumption that was once paid out of earnings / revenues is now paid by debt: higher education, paving of roads, auto repairs, etc.

Rather than restructure the economy, the political and financial elites have papered over the imbalances with debt . Debt, we're assured, is harmless; we're going to "grow our way out of debt" by borrowing more. But borrowing more to consume more isn't increasing productivity, and this is one reason why wages have stagnated and prices have soared in the past decade.

The instabilities and imbalances of economies can be papered over with debt for a time, but debt and financialization tricks don't actually fix what's broken--they make the problems worse. Welcome to the recession of 2019-2021, when central bank policies are finally revealed as the' source of half our problems rather than the solution.

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Talking Monkey
4 hours ago, DurhamBorn said:

No idea,my roadmap says $1340 down to $1250 up to $1500+ down below $1000 and then trending to $5000/$8000 by 2028.The destination is what counts though because the roadmap short term contains lots of short term cycle work and sentiment,,the roadmap long term contains mostly macro/liquidity work and long term cycles.These roadmaps are not trading calls,its the 100% lesson of them,NOT trading calls.They are for long term positioning.In the broadest terms id hold some now.Id sell perhaps 20%/30% if gold hits $1500,if it then did go below $1000 id reinvest that 30% back in and then sit back and let the cycle unfold.Thats my personal opinion,not investment advice.

Im still pretty convinced the cycle will be a reflation and im also convinced hardly anyone is invested for that.A distribution cycle alongside a reflation cycle will be very painful for people in cash,leveraged houses and a lot of sectors of the economy.

 

Hi DB what does distribution cycle mean

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Talking Monkey
2 hours ago, Cattle Prod said:

I came onto the thread today to post about Venezuela. Interesting how it cropped up a page back.

I've recently read that food is trading at a higher price there at the moment than drugs. And that's what it comes down to in the end, when all else is failing: life. 

I'm fully on board with you guys for the coming inflationary cycle. There is mot a doubt in my mind that it'll be the investment opportunity of my lifetime. Therefore, if I don't get greedy and f*ck it up, I'll be retiring at the end of it (in my 40s). I recall DB saying he has no view on what comes after that, and that there are some potentially scary outcomes. I don't know either, but there will almost certainly  be some degree of society fracturing. Maybe not Venezuela. Mut maybe.

I'm from a farming background, so I know what I'm doing. I'm with Jim Rogers: agriculture all the way. I will pivot out of most PMs and oil, particulary if they go bubbly, and invest in forestry (directly) and low maintenance/low impact agricultural land (beef) in the UK/Ireland/Canada. Nothing massive, just enough for me and my kin. I already have a "practice" patch, and am currently learning chainsaw skills, amongst others. Lits of fun.

The no. 1 asset of course is my health and strength.

Who knows the future. But thats where I hope to be in 6-8 years time.

With you on the Number 1 asset being health and strength. I'll be also really upping all my practical skills. I expect some serious fractures in society come 2025 if things unfold as we discuss here

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