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Credit deflation and the reflation cycle to come.


DurhamBorn

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I'm back!   Just been catching up on about 10 pages while my laptop was out of action.  Poor thing stopped dead and now has a new hard drive (courtesy of my son).  I also managed a look at  my mini portfolio which is looking a bit healthier (thanks to GDX mainly) so things are looking up.  Many thanks to DB who is "on the money" with predictions.

I agree with the recent comments about council tax which at the moment accounts for approx 20% of my state pension income.  I bet a good proportion of it goes on paying ex council employees pensions.  They used to publish the figures and produced a handy pie chart but now they're hidden away somewhere on the local authority website.  At least I managed a few minutes on their computer in the library for free so some return on the amount they charge me.  (Some authorities make you pay extra for this)

I also got a Tescos divi today and I'm with SP in buying shares in companies I use....it seems to make sense and every little helps...........

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17 hours ago, Inoperational Bumblebee said:

YCA (Yellowcake) and GCL (Geiger Counter Ltd) are the two I'm aware of.

Hi Inoperational Bumblebee, can I ask do you still hold your ITPS ETF, or have you already sold? The reason I ask is that I bought some ITPS a few months ago and after share price initially increasing, the price has begun to struggle over the last couple of weeks.

I believe/theory is - if I wanted to just hold ITPS for short term hold (which I do!) - the sell signal would be to sell after the share price had increased due to market reactions over news of a surprise uptick in US inflation figures.

Not asking for specific investment advise of course, but I suppose what i'm not clear about is whether the ITPS share price behaviour is merely a resistance/wobble and it is still worth holding for the anticipated news of inflation and subsequent market reaction, or is there perhaps something else technical going on and might as well sell?        

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18 hours ago, Harley said:

Bingo!  I assume, where I can, a longer term real rate of return (net of inflation) of zero!  That's based on what to me is a reasonably derisked asset allocation still mainly in equities.  Anything over that is a bonus to be banked but not to be banked on!  Note the percentages that now have to be used in projections for the low  medium and high scenarios.  I believe the top rate is 7%! 

I believe Niels Jensen projects global returns to be 4% return after inflation over next 10 years, and 5-7% over next 20 years. These are general market returns so I guess if were to successfully prepare/invest for the coming cycles returns would do better? 

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3 hours ago, janch said:

 

I also got a Tescos divi today and I'm with SP in buying shares in companies I use....it seems to make sense and every little helps...........

I was going to do the same with the London Rubber Company (Durex) but decided not to as the divi was poor due to the lack of interest at my ;-)

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Yellow_Reduced_Sticker
6 hours ago, sancho panza said:

If you have the money you can adjust URA to suit a small cross section of shares with a little work.Some of the holdings are out eg Barrick gold/Rio/BHP/Mitsubishi/Macquarei.

https://etfdb.com/etf/URA/

 

hey SP, i checked the long term chart of URA, and i like the look of it, sideways flat line...

it either goes BUST or maybe rockets to the moon :o wanted to bung in 300 quid for a speculative punt well checked out HL and...

image.jpeg.a796caad77afc6dac3867cd4ba23210b.jpeg

 

...the EU no doubt, the sooner we' OUT of that corrupt SH*T EU the better, get ya finger out Boris!:Old:

 

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2 hours ago, MrXxx said:

I was going to do the same with the London Rubber Company (Durex) but decided not to as the divi was poor due to the lack of interest at my ;-)

I used to work for SSL who made Durex,my first job there was getting the joy jelly lube to flow right,i kid you not the factory was in Peterlee.

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One percent
2 hours ago, MrXxx said:

I was going to do the same with the London Rubber Company (Durex) but decided not to as the divi was poor due to the lack of interest at my ;-)

Sat right next to shadbolts with their “veneer of the week”. :)

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For Uranium i should add Harmony Gold and Sibanye are big producers its a bi-product of gold production in their deep mines.They both have massive amounts on their tailings and still produce.Harmony also owns the only plant in South Africa for making the yellow cake,it came when they bought the Anglogold mine last year.They dont push Uranium at the moment as its about break even on their costs and they just tick the plant over,but could prove very profitable in a bull.

I used to love the fund URA and have traded it many times over the years and made some great profits.

I heard today at work from a good source that the order books are empty for next year and likely big job losses unless things improve.Suits me to leave then,but if true feel sorry for most of the other people.

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Inoperational Bumblebee
7 hours ago, JMD said:

Hi Inoperational Bumblebee, can I ask do you still hold your ITPS ETF, or have you already sold? The reason I ask is that I bought some ITPS a few months ago and after share price initially increasing, the price has begun to struggle over the last couple of weeks.

I believe/theory is - if I wanted to just hold ITPS for short term hold (which I do!) - the sell signal would be to sell after the share price had increased due to market reactions over news of a surprise uptick in US inflation figures.

Not asking for specific investment advise of course, but I suppose what i'm not clear about is whether the ITPS share price behaviour is merely a resistance/wobble and it is still worth holding for the anticipated news of inflation and subsequent market reaction, or is there perhaps something else technical going on and might as well sell?        

TINA, DYOR...

Still holding. Currently 6% up. Will probably wait for another couple of CPI reports then dump if going nowhere. I'd sell earlier if something else was the right price that I wanted to buy, but I've got a decent amount invested where I want so no massive rush. Honestly, I am the last person you want to emulate in terms of timing - I sold IBTL way too early.
I'm basically waiting for a sharp uptick in inflation to give it a boost, but it seems to be slowly drifting up anyway hence my continued hold. It's also a currency hedge, and with the recent bounce off 1.25 I'd probably wait until cable resumes it's downtrend to consider selling.

My attention is back on crypto at the moment tbh.

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1 hour ago, Inoperational Bumblebee said:

TINA, DYOR...

Still holding. Currently 6% up. Will probably wait for another couple of CPI reports then dump if going nowhere. I'd sell earlier if something else was the right price that I wanted to buy, but I've got a decent amount invested where I want so no massive rush. Honestly, I am the last person you want to emulate in terms of timing - I sold IBTL way too early.
I'm basically waiting for a sharp uptick in inflation to give it a boost, but it seems to be slowly drifting up anyway hence my continued hold. It's also a currency hedge, and with the recent bounce off 1.25 I'd probably wait until cable resumes it's downtrend to consider selling.

My attention is back on crypto at the moment tbh.

thank you Inoperational Bumblebee, its good to get feedback from someone who also holds ITPS.

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9 hours ago, One percent said:

Sat right next to shadbolts with their “veneer of the week”. :)

Yes that's right, I had forgotten all about that...as kids we used to look out for that on the way to our Nan`s!

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Democorruptcy
16 hours ago, janch said:

I'm back!   Just been catching up on about 10 pages while my laptop was out of action.  Poor thing stopped dead and now has a new hard drive (courtesy of my son).  I also managed a look at  my mini portfolio which is looking a bit healthier (thanks to GDX mainly) so things are looking up.  Many thanks to DB who is "on the money" with predictions.

I agree with the recent comments about council tax which at the moment accounts for approx 20% of my state pension income.  I bet a good proportion of it goes on paying ex council employees pensions.  They used to publish the figures and produced a handy pie chart but now they're hidden away somewhere on the local authority website.  At least I managed a few minutes on their computer in the library for free so some return on the amount they charge me.  (Some authorities make you pay extra for this)

I also got a Tescos divi today and I'm with SP in buying shares in companies I use....it seems to make sense and every little helps...........

OBR figures:

Quote

 

In our latest forecast, we expect public sector pensions spending in 2018-19 to total £13.3 billion (reflecting £43.3 billion of total payments less £29.9 billion of contributions). That would represent around 1.6 per cent of total public spending, and is equivalent to £470 per household and 0.6 per cent of national income.

https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/public-service-pension-payments-net/

 

I remember reading Scotland was up to 54% of council tax revenue  on pensions. It's mere coincidence that Scotland whacked up council tax in 2016. It will keep the public sector worker's 2nd homes and BTL ticking along so private sector workers can be outbid for a shelter.

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Yellow_Reduced_Sticker
10 hours ago, DurhamBorn said:

For Uranium i should add Harmony Gold and Sibanye are big producers its a bi-product of gold production in their deep mines.They both have massive amounts on their tailings and still produce.Harmony also owns the only plant in South Africa for making the yellow cake,it came when they bought the Anglogold mine last year.They dont push Uranium at the moment as its about break even on their costs and they just tick the plant over,but could prove very profitable in a bull.

I used to love the fund URA and have traded it many times over the years and made some great profits.

I heard today at work from a good source that the order books are empty for next year and likely big job losses unless things improve.Suits me to leave then,but if true feel sorry for most of the other people.

 
@DurhamBorn I didn't know that so thanks! I hold both Harmony Gold and Sibanye AND they are doing VERY well so thanks again, now i only have £1K in each and have allocated an extra £1K for both, but this is my dilemma, do i sell soon to takes profits...because as you say we could have a pull-back in gold, then reinvest the total of 2K in each IF? they dive, it ain't easy this game!
 
BTW. I'm NOT asking for advice, its just that you are on the ball with most of ya predictions, I'm now tempted to grab the profits from Harmony Gold and Sibanye soon! 
 
However I reckon i'll end up doing the same as i did for Endeavour Silver, it had good profits, and i'm thinking its going to the MOON:D then it dives i miss out on the profits ...and i buy more AT its lower price Ha-ha LOL!xD ...any how my total Endeavour holding is only down 3%
 
URA ...oh so looks like a safe bet, in which case i could of put in more, its just a pity we can't trade it!
I really do like the chart of it.
 
Looking at the chart below i can imagine YOU bought at EVERY REDUCED yellow sticker support point then sold out when it approached near resistance!
image.jpeg.852469afc593b7d3c6b743721284ad92.jpeg
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@Yellow_Reduced_Sticker 16 and 17 i got the bounces in URA rough figures were i took 50% both times.Crazy we cant buy all those ETFs now.I used to love COPX,the country funds etc.The beauty was as a contrarian you had a fantastic options.There is always somewhere out of fashion.Ironic that at the moment its the UK outside of a few large caps.Steve Kaplan is the master at the ETF game as a contrarian.If you understand how he works he is a superb investor and put me onto many of ones that made good money.Fucking EU bollocks as usual.

For the miners when to sell is always tough.I use ladders and have quite large amounts in each (usually between £5k and £8k) and Harmony i actually ended up with £18k,but sold half of that now.So i tend to sell out a ladder or two at 30% up then run the rest according to my roadmap.I also am quite happy to sell an entire holding early if it runs hard,i sold Goldfields out after a 50% jump in a month.I couldnt resist buying my old friend Imperial Brands with the profits.

So its a tough choice.I expect pull backs could be shallow in the GDX,though at $26 there is risk,and those gaps at around $21/22 area could come back into play.You could always sell one of the SA miners and lock in the profits.Endeavour is a dangerous share with silver where it is,but if it can survive then it might 50 bag when silver hits $180.In the tech boom i had a couple of stocks i sold for a £7k profit (100% gain) that then went up 40 times in price.One called Staffware cost me £60k in profits in a week.I sold ,then they rocketed.That was a horrible feeling.

 

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If you are not trading, just continue to hold the gold/silver shares continuously, adding when prices fall. That's what I've been doing for 15+ years. GDX, GDXJ, SIL, GOEX etc etc and more recently Vista Gold, Yamana, Endeavour Silver etc.

I'm not interested in small or even medium gains. Totally irrelevant. I'm waiting for at least gold $5000+ before I even consider selling some. Preferably wait until it is closer to $10000. The amounts made when that happens will be truly life changing for those who have been the whole journey.

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Talking Monkey
16 minutes ago, Errol said:

If you are not trading, just continue to hold the gold/silver shares continuously, adding when prices fall. That's what I've been doing for 15+ years. GDX, GDXJ, SIL, GOEX etc etc and more recently Vista Gold, Yamana, Endeavour Silver etc.

I'm not interested in small or even medium gains. Totally irrelevant. I'm waiting for at least gold $5000+ before I even consider selling some. Preferably wait until it is closer to $10000. The amounts made when that happens will be truly life changing for those who have been the whole journey.

That makes sense to say for the long haul, but in the big downturn when the stockmarket halves  would PMs go down hard too and would that cause some of the miners to go bust, its that bit that I'm trying to get my head round

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leonardratso
2 hours ago, DurhamBorn said:

@Yellow_Reduced_Sticker 16 and 17 i got the bounces in URA rough figures were i took 50% both times.Crazy we cant buy all those ETFs now.I used to love COPX,the country funds etc.The beauty was as a contrarian you had a fantastic options.There is always somewhere out of fashion.Ironic that at the moment its the UK outside of a few large caps.Steve Kaplan is the master at the ETF game as a contrarian.If you understand how he works he is a superb investor and put me onto many of ones that made good money.Fucking EU bollocks as usual.

For the miners when to sell is always tough.I use ladders and have quite large amounts in each (usually between £5k and £8k) and Harmony i actually ended up with £18k,but sold half of that now.So i tend to sell out a ladder or two at 30% up then run the rest according to my roadmap.I also am quite happy to sell an entire holding early if it runs hard,i sold Goldfields out after a 50% jump in a month.I couldnt resist buying my old friend Imperial Brands with the profits.

So its a tough choice.I expect pull backs could be shallow in the GDX,though at $26 there is risk,and those gaps at around $21/22 area could come back into play.You could always sell one of the SA miners and lock in the profits.Endeavour is a dangerous share with silver where it is,but if it can survive then it might 50 bag when silver hits $180.In the tech boom i had a couple of stocks i sold for a £7k profit (100% gain) that then went up 40 times in price.One called Staffware cost me £60k in profits in a week.I sold ,then they rocketed.That was a horrible feeling.

 

same with crypto, i trade in and out playing troughs and waves, but they then fail that model and shoot to the moon(or to the floor), usually leaving me behind arnd then i um and arr about joining that wave higher up , ive learnt not to since it invariably leads to a reset eventually and you are stuck higher. Probably better to run it like a fund and just keep trickling in on a constant basis and not be hit by the big up/down swings.

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3 hours ago, leonardratso said:

same with crypto, i trade in and out playing troughs and waves, but they then fail that model and shoot to the moon(or to the floor), usually leaving me behind arnd then i um and arr about joining that wave higher up , ive learnt not to since it invariably leads to a reset eventually and you are stuck higher. Probably better to run it like a fund and just keep trickling in on a constant basis and not be hit by the big up/down swings.

Yes on most investments,but some like URA are very cyclical.The knack is being prepared to be sat maybe 25% down for a few years.The fund was a bit concentrated anyway and i never did but a big chunk in,it was always a quite small amount.I found COPX was similar in that you had to be prepared to be sat in it with quite large losses for a good while.I miss not having access to all those funds though as it made it much easier to keep a good spread of contrarian assets.Its almost like the EU dont want us in dollar assets,i wonder why?

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4 hours ago, Errol said:

If you are not trading, just continue to hold the gold/silver shares continuously, adding when prices fall. That's what I've been doing for 15+ years. GDX, GDXJ, SIL, GOEX etc etc and more recently Vista Gold, Yamana, Endeavour Silver etc.

I'm not interested in small or even medium gains. Totally irrelevant. I'm waiting for at least gold $5000+ before I even consider selling some. Preferably wait until it is closer to $10000. The amounts made when that happens will be truly life changing for those who have been the whole journey.

I agree with that mostly Errol and would also say i understand anyone taking that position and sticking with it.There is a very real chance £20k could be turned into £500k in the space in the next cycle so the potential is open to almost everyone.I myself went back to work to do something similar.I had my full allocation in the sector (about 20% of portfolio) and i wouldnt break my own rules.So i went back to work and have put every penny in wages and dividends since i went back into miners.Im counting it as outside my portfolio and giving up a years labour.I guess im more conservative as i get older.The truth is my portfolio delivers enough income when invested in divi stocks to retire and im not really interested in doubling it now,but a nice 30% on top would be very nice and so have taken some profits to funnel into stocks i want (i bought some Imperial last week with some).However im also well aware that there might be a chance here to make generational wealth.ie clear all three of my childrens mortgages and give them a dividend portfolio each.I really do think silver is going to around $200 in the next cycle,maybe even $300 and $10k gold is likely if inflation runs hot.That would deliver some 100 baggers in the space i expect and a lot of the sector would 25x 50x etc.If all i had was £10k id do exactly like you say,id buy 7 miners,add to them on dips with any spare cash and wait for the real bull to arrive.

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Talking Monkey
5 hours ago, DurhamBorn said:

I agree with that mostly Errol and would also say i understand anyone taking that position and sticking with it.There is a very real chance £20k could be turned into £500k in the space in the next cycle so the potential is open to almost everyone.I myself went back to work to do something similar.I had my full allocation in the sector (about 20% of portfolio) and i wouldnt break my own rules.So i went back to work and have put every penny in wages and dividends since i went back into miners.Im counting it as outside my portfolio and giving up a years labour.I guess im more conservative as i get older.The truth is my portfolio delivers enough income when invested in divi stocks to retire and im not really interested in doubling it now,but a nice 30% on top would be very nice and so have taken some profits to funnel into stocks i want (i bought some Imperial last week with some).However im also well aware that there might be a chance here to make generational wealth.ie clear all three of my childrens mortgages and give them a dividend portfolio each.I really do think silver is going to around $200 in the next cycle,maybe even $300 and $10k gold is likely if inflation runs hot.That would deliver some 100 baggers in the space i expect and a lot of the sector would 25x 50x etc.If all i had was £10k id do exactly like you say,id buy 7 miners,add to them on dips with any spare cash and wait for the real bull to arrive.

Its the chance to make generational wealth that does it for me, to set up the grandkids that haven't even been born yet

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Inoperational Bumblebee
9 hours ago, leonardratso said:

same with crypto, i trade in and out playing troughs and waves, but they then fail that model and shoot to the moon(or to the floor), usually leaving me behind arnd then i um and arr about joining that wave higher up , ive learnt not to since it invariably leads to a reset eventually and you are stuck higher. Probably better to run it like a fund and just keep trickling in on a constant basis and not be hit by the big up/down swings.

I did this last time round with a similar end result. Consequently, I only trade with half my crypto. The two ways this can end up are: I make loads trading and I've still got a chunk extra to add, or I lose all the trading stack and I've still got a chunk left.
I need to decide what moon is for me though. I'd hate to sell out completely at say 50k for it to hit something utterly ridiculous.

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leonardratso

aye, good plan. I made plenty last year through sheer luck more than anything, lost a wodge also, but net was up. Pulled everything out except for a hundred quid and just gamble with that much these days, as soon as its £200, ill pull a £100 out. I had so many accounts i couldnt keep up, just ignore them all now and use gdax alone, well, coinbase pro as they call it now, prefer that since theyve got a uk barclays account now and only charge a quid to withdraw, mind they seem to have removed buy/sell at market price these days, but no big deal.

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sancho panza

 

 

12 hours ago, Errol said:

If you are not trading, just continue to hold the gold/silver shares continuously, adding when prices fall. That's what I've been doing for 15+ years. GDX, GDXJ, SIL, GOEX etc etc and more recently Vista Gold, Yamana, Endeavour Silver etc.

I'm not interested in small or even medium gains. Totally irrelevant. I'm waiting for at least gold $5000+ before I even consider selling some. Preferably wait until it is closer to $10000. The amounts made when that happens will be truly life changing for those who have been the whole journey.

Have to say Errol that I've come round to your view through bitter experience over the last ten years of watching the central banks fuck things up and then fuck things up even more trying to reverse their original fuck ups.

My name is Sancho Panza and I have become a gold bug.

 

As I've said previously,I'm an awful timer of PM's and will be holding until s suitable exponential phase reminsicent of the tech bubble,when we'll sell and buy somethign more mundane with it.

8 hours ago, DurhamBorn said:

I agree with that mostly Errol and would also say i understand anyone taking that position and sticking with it.There is a very real chance £20k could be turned into £500k in the space in the next cycle so the potential is open to almost everyone.I myself went back to work to do something similar.I had my full allocation in the sector (about 20% of portfolio) and i wouldnt break my own rules.So i went back to work and have put every penny in wages and dividends since i went back into miners.Im counting it as outside my portfolio and giving up a years labour.I guess im more conservative as i get older.The truth is my portfolio delivers enough income when invested in divi stocks to retire and im not really interested in doubling it now,but a nice 30% on top would be very nice and so have taken some profits to funnel into stocks i want (i bought some Imperial last week with some).However im also well aware that there might be a chance here to make generational wealth.ie clear all three of my childrens mortgages and give them a dividend portfolio each.I really do think silver is going to around $200 in the next cycle,maybe even $300 and $10k gold is likely if inflation runs hot.That would deliver some 100 baggers in the space i expect and a lot of the sector would 25x 50x etc.If all i had was £10k id do exactly like you say,id buy 7 miners,add to them on dips with any spare cash and wait for the real bull to arrive.

I'd agree ,you wrote somewhere else about the tech bubble in the 90's which was my first.Like you I got out early,and missed the exponential phase,but I got out.The PM sector has all the hallmarks and I'll be learning my lessons form the past and jsut buying the dips till the exponential phase.

Monetary policy is in an 1970's ford cortina travelling down the m1 at 100mph with bold tyres in the pouring rain.An accident searching for a crash.

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sancho panza

Credit deflation and price inflation can happily co exist

https://wolfstreet.com/2019/06/21/home-sales-new-mortgages-plunge-in-turkey-as-its-financial-crisis-bites/

Sales of homes of all types in Turkey plunged 31% year-on-year in May to just 82,252 units, after having already plunged 18% year-over-year in April, according to the Turkish Statistical Institute. It was the sharpest year-over-year drop in the data going back to 2013, as Turkey’s economic crisis continues to bite. For the first five months of 2019, home sales dropped 19% compared to the same period last year, to 423,088 units.

The six-month moving average, which reduces the large seasonal and month-to-month swings of home sales in Turkey, dropped to the lowest levels since 2013-2014:

Turkey-home-sales-2019-06-21.png

In the meantime, the deleveraging continues, which is bad news not only for Turkey’s state-owned banks, which are having to pick up much of the slack in the credit markets, but also the five major European lenders that have carved out a sizable, and for many years highly profitable, presence in Turkey — — BBVA, Unicredit, BNP-Paribas, HSBC and ING — and are now struggling with rising default rates in their Turkish entities.

Unicredit had to splash out roughly €1.5 billion last year to support its part-owned Turkish subsidiary Yapi Kredi, of which it owns a 40% stake. Spain’s BBVA, which owns just under half of Turkey’s largest listed lender, Garanti Bank, has warned that conditions are likely to further deteriorate in 2019 on the back of stalling credit creation and rising defaults.

This week, the Bank of Spain, worried about the exposure of Spanish banks, echoed the concerns raised by the ECB, which had warned last year about the risks of Turkey’s unraveling economy for European banks. The Bank of Spain now warned for the second time this month of the contagion risks posed not just by BBVA’s outsized exposure to Turkey but also to Argentina, whose economy continues to sink despite the $56 billion bailout it received from the IMF last year. By Don Quijones.

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