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Credit deflation and the reflation cycle to come.


DurhamBorn

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@DurhamBorn born and all : talking about China , what is that about Lord Dyson moving the head quarters over there?

Special Incentive? Some sort or smoke screen?  - i’ve been busy today and couldnt join the dots yet ..,🤔🤔🤔 

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Chewing Grass
2 minutes ago, M.C. UK said:

@DurhamBorn born and all : talking about China , what is that about Lord Dyson moving the head quarters over there?

Special Incentive? Some sort or smoke screen?  - i’ve been busy today and couldnt join the dots yet ..,🤔🤔🤔 

I think Dyson have lost the plot and the battle with appliances, the competition have upped their game so much that his products have been found to be somewhat expensive and the vacuum cleaners somewhat lacking these days.

The other stuff is niche gimmickery, my guess is he is going to sell out.

Apparently 'On 22 January 2019, Dyson announced plans to move the company HQ to Singapore in order to take advantage of the recently negotiated free trade agreement between the European Union and Singapore that would not be available to Dyson in a post-Brexit United Kingdom. '

Now Dyson is a bit of a politically motivated twat so this sort of ploy is nothing unusual for him.

'It is said that Dyson has around 7,000 employees. Dyson has not publicly stated where those employees are actually located, though it is known that VS Industry Bhd (VSI) currently has around 4,250 employees at their Malaysian facility which manufactures Dyson products.

So Dyson plays at being British but in reality employs fuck-all British people in proportion to his faux Britishness.

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20 minutes ago, Wheeler said:

Thanks for that Barnsey. I’ll second the recommendation, it’s well worth watching and covers a lot of the topics discussed on here.

Spoiler: his suggestions for investors

  • government debt - US treasuries 
  • Gold and silver
  • mining stocks

Also good too see them discuss lack of inflation due to anaemic money velocity, as DB hints at above, by directing stimulus into reflation assets and "the people" rather than the wealthy as we've seen in past decade, we'll witness velocity sharply increase leading to much higher inflation than many will see coming...

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Talking Monkey
6 hours ago, Majorpain said:

Depends on CCP's reaction to the crisis.  Id put money on between much more expensive to unobtanium though.

I do think the world has run out of usable cheap labour to exploit for now.

Does automation negate some of the effects of cheap labour running out. And is it really running out I understand in places like India there is tons of underemployed young folk etc

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3 hours ago, Barnsey said:

https://www.realvision.com/defensive-investing-in-an-uncertain-world

Great 1 hour interview with Victor Sperandeo, highly recommended

Thanks, I'll have to watch it more than once to digest it all. 

In particular loved the segment from 52:40, as I was always puzzled why QE was directed at buying back bonds only, rather than general helicopter money.

Spoiler alert too: stimulate the economy, without causing hyperinflation, but raise asset prices as a side effect.

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1 hour ago, Chewing Grass said:

So Dyson plays at being British but in reality employs fuck-all British people in proportion to his faux Britishness.

Yes, and of course the £9.5 billion personal fortune for Mr. Dyson isn't enough so he needs to look for as many ways as possible to pay people less and get jobs into the East.

36 minutes ago, Bear Hug said:

Spoiler alert too: stimulate the economy, without causing hyperinflation, but raise asset prices as a side effect.

Per Austrian theory this creates massive credit distortions and will ultimately lead to the end of the entire system.

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These funds investing in Infrastructure are part of VT Gravis Infrastructure fund. Might be worth a look for anybody thinking of reflation assets and roads, bridges, solar.

 

Sector%

GCP Infrastructure Investment Ord9.90

Renewables Infrastructure Grp9.67

Bluefield Solar Income Fund7.71

MedicX Ord6.83

NextEnergy Solar Ord

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24 minutes ago, Errol said:

Per Austrian theory this creates massive credit distortions and will ultimately lead to the end of the entire system.

But wouldn't the helicopter money have just ended it much sooner?

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1 hour ago, Talking Monkey said:

Does automation negate some of the effects of cheap labour running out. And is it really running out I understand in places like India there is tons of underemployed young folk etc

There's a limit to how much automation is worth throwing at goods at the cheap end, but yes will negate a bit and increasingly so with time, forget India, generally can't manufacture for toffee.

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1 hour ago, Bear Hug said:

But wouldn't the helicopter money have just ended it much sooner?

In the UK it was helicopter money for chosen people.My friend gets £1800 a month in benefits sat on the sofa at home.The BOE monetized the entire tax credit bill for 7 years.It flows through those people to asset owners.The winners are asset owners and benefit claims.The losers savers and anyone who works.

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31 minutes ago, DurhamBorn said:

In the UK it was helicopter money for chosen people.My friend gets £1800 a month in benefits sat on the sofa at home.The BOE monetized the entire tax credit bill for 7 years.It flows through those people to asset owners.The winners are asset owners and benefit claims.The losers savers and anyone who works.

I agree but [possibly] because it was being absorbed by the property costs and was limited (i.e. your friend can't just get a job and have more money - they'd lose benefits),  we didn't get a runaway inflation.

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For those interested, latest podcast from Armstrong from 15 Jan 2019.  

 

Part 2 goes straight into Gold & Pms forecasts etc.  He reiterates from Jan 2020 there will be a change in confidence in the general public at large and the US elections in Nov 2020 will be quite violent.  Inflation to come with rising stocks and commodities incl PMs from 2021-2024

http://financialsurvivalnetwork.com/2019/01/martin-armstrong-bull-market-in-stocks-has-way-more-to-go-part-1/

http://financialsurvivalnetwork.com/martin-armstrong-part-2/

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11 hours ago, SillyBilly said:

Yes, forward thinking most certainly but I do try and recognise that there are millions of Brits who are on subsistence wages. I've never had to worry about a large MOT payment or anything like that given I've always been well paid, I know for a lot of people that sort of unbudgeted expense could tip them over the edge. Some people can't afford to save and they have my sympathy. 

I think you have covered it right there with one word `unbudgeted`...some people do not know how to manage a budget...what I do know about these people is that they always seem to have money for booze, fags, the bookies and the latest iPhone...and laugh at my four year old model!...I have sympathy for the ones that become ill/have an accident and so cannot support themselves, I don't have any for the ones that make poor financial decisions.

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16 hours ago, Ma2 said:

Gold, the Bank of England, Venezuela ... and Deutsche Bank. A worthy movie plot.

https://www.forexlive.com/centralbank/!/gold-the-bank-of-england-venezuela-and-deutsche-bank-a-worthy-film-plot-20190122

Cant wait for the film

The Reuter’s article...

https://www.google.co.uk/amp/s/uk.mobile.reuters.com/article/amp/idUKKCN1PF1Z8

This got me thinking...ok, we don't have the gold holdings of Venezuela but if you have some with a company like BV is it better to spread your holdings around several countries I.e. New York, London, Zurich rather than having it all in one location?

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4 minutes ago, Castlevania said:

Why’s Metro Bank down by over a quarter?

From the FT

 

Shares in Metro Bank dived 27 per cent on Wednesday affter a profit warning shook investor confidence in the upstart challenger to High Street lenders. The FTSE 250 lender warned that its full-year profits and capital levels will be weaker than expected after a “soft” end to the year and a mistake in the way it had previously accounted for some of its commercial loans.

 

The bank said underlying profit before tax for 2018 was likely to come in at around £50m. That represents a 138 per cent increase on the previous year, but was still below analyst forecasts of around £59m.


Investor worries about competition and falling margins have been exacerbated by economic uncertainty and the prospect of a hard Brexit that could hit property values. Metro’s balance sheet is particularly exposed to the property market: mortgages accounted for 65 per cent of its loanbook at the end of June, and a significant further portion of its commercial loan book is linked to commercial real estate.

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Yellow_Reduced_Sticker

Cor Blimey ! 

£ Pound NOW over 1.30 to $!

Who would of thought that with all the political shenanigans of the last few days...

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5 hours ago, DoINeedOne said:

From the FT

 

Shares in Metro Bank dived 27 per cent on Wednesday affter a profit warning shook investor confidence in the upstart challenger to High Street lenders. The FTSE 250 lender warned that its full-year profits and capital levels will be weaker than expected after a “soft” end to the year and a mistake in the way it had previously accounted for some of its commercial loans.

 

The bank said underlying profit before tax for 2018 was likely to come in at around £50m. That represents a 138 per cent increase on the previous year, but was still below analyst forecasts of around £59m.


Investor worries about competition and falling margins have been exacerbated by economic uncertainty and the prospect of a hard Brexit that could hit property values. Metro’s balance sheet is particularly exposed to the property market: mortgages accounted for 65 per cent of its loanbook at the end of June, and a significant further portion of its commercial loan book is linked to commercial real estate.

Its commercial loan book looks like the problem especially with whats going on with the high street retail collapsing. Its residential loan book I would suggest is fairly robust from what I hear

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6 hours ago, Castlevania said:

Why’s Metro Bank down by over a quarter?

From their notes (my bold)

Quote

Risk weighted assets at full year are expected to be approximately £8.9bn with the increase driven by both net loan growth and an adjustment in the risk weighting of certain commercial loans secured on property and certain specialist BTL loans to large portfolio landlords. Total capital ratio is expected to be approximately 15.8% as at December 31 2018.
 

 

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7 hours ago, MrXxx said:

This got me thinking...ok, we don't have the gold holdings of Venezuela but if you have some with a company like BV is it better to spread your holdings around several countries I.e. New York, London, Zurich rather than having it all in one location?

I use BV. Zurich for me!

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1 hour ago, Yellow_Reduced_Sticker said:

Cor Blimey ! 

£ Pound NOW over 1.30 to $!

Who would of thought that with all the political shenanigans of the last few days...

A little pump before the next dump? I brought some $ home the other week, not quite the bottom (for the time being) but close enough for me.

Which way is going on the on the 30th March? Any takers?

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sleepwello'nights
3 hours ago, Yellow_Reduced_Sticker said:

Cor Blimey ! 

£ Pound NOW over 1.30 to $!

Who would of thought that with all the political shenanigans of the last few days...

Its no surprise to me. I knew it would strengthen against the USD soon after I returned from my holiday in the US.

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39 minutes ago, sleepwello'nights said:

Its no surprise to me. I knew it would strengthen against the USD soon after I returned from my holiday in the US.

Can you keep us all informed of when you next plan t go on holiday and where...I fancy a bit of Forex trading! :-) :-) :-)

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