Credit deflation and the reflation cycle to come (part 3)

[Calcutta]

This does feel like a critical point in time now. I'm not old enough to remember the 70s and the oil crisis but looking back it seems that was when the world changed. Perhaps this is it. 

We need to stop buying all our shit from China. Which may prove to be easier said than done. 

[HousePriceMania]

Not that it helped me with POLY....but

 

Market Summary > EVRAZ plc

72.00 GBX+12.00 (20.00%)today

3 Mar, 16:48 GMT • Disclaimer

LON: EVR

[nirvana]

2 minutes ago, HousePriceMania said:

Not that it helped me with POLY....but

 

Market Summary > EVRAZ plc

72.00 GBX+12.00 (20.00%)today

3 Mar, 16:48 GMT • Disclaimer

LON: EVR

i wouldn't get excited about that....THE STOCK MARKET IS CLOSED 

[Democorruptcy]

1 minute ago, nirvana said:

i wouldn't get excited about that....THE STOCK MARKET IS CLOSED 

He's fallen for a price in the mad hour after closing, it's probably 53p!

[stoobs]

 

[Harley]

5 minutes ago, stoobs said:

 

So they have stifs as presenters too?  Should have got Daniela Camborne.  She'd have snatched the bottle and asked for a glass (she's a lady don't ya know)! 

PS:  I have no idea if this would be true but I am enamored by her wicked smile! 

[Harley]

19 minutes ago, Calcutta said:

This does feel like a critical point in time now. I'm not old enough to remember the 70s and the oil crisis but looking back it seems that was when the world changed. Perhaps this is it. 

I remember my dad buying four gold coins.  I had no idea then.  I do now!  

[Loki]

26 minutes ago, Calcutta said:

We need to stop buying all our shit from China. Which may prove to be easier said than done. 

Act 1 Scene 1 of this thread!

[Bobthebuilder]

20 minutes ago, Harley said:

I remember my dad buying four gold coins.  I had no idea then.  I do now!  

I am sure the next decade is going to be very different from the 70s oil shock in many ways, but your post reminded me of my old man during the 1970s.

He bought a large house on a big plot in Wiltshire, he could barely afford to maintain it, old windows, kitchen etc. It had central heating, but it was never on as he couldn't afford the heating oil, so we all sat around a coal fire in the dark, ice on the inside of the windows etc.

By the end of the decade, the house had almost tripled in value. He sold it, downsized and never really worked again.

I am sure it will not be that easy for us.

Sorry for the ramble, you sent me off down memory lane.

[Axeman123]

Shadow currency controls:

 

[BadAlchemy]

32 minutes ago, Harley said:

I remember my dad buying four gold coins.  I had no idea then.  I do now!  

Yes, We still have the krugerrand my old dad bought.. 1974 date perhaps. He was a working class cockney but very clued up and hard working. Had a little sideline buying and selling antique maps and prints, old coins, china etc. to keep the value of his wages safe from inflation. We still have quite a lot of his stock which will pass to me and my brother in due course. I'll be keeping my share as is. Brother was talking about selling his for cash. So I mentioned  about all the currency printing, inflation coming, gold likely going to $10,000 etc etc.. I think I could sense the penny starting to drop...hopefully. Entirely his choice of course.

[HousePriceMania]

1 hour ago, Democorruptcy said:

He's fallen for a price in the mad hour after closing, it's probably 5 23p!

 

[Shamone]

3 hours ago, Joncrete Cungle said:

It was £1 a litre that kicked the blockades off if I remember correctly. I had a moped at the time and I remember filling it for £5 and thinking that was expensive.

I remember that. Pretty sure it was £1. The roads were almost as quiet as the first few days of the coof lockdown.

[CannonFodder]

6 hours ago, Arthur Dent said:

Just been talking to my wife about this very thing. Whether it’s covid, global warming or Ukraine immediately the media push out the message people are out there waving flags(or masks as appropriate 😀) with no thought whatever for an alternative narrative. And if you happen to put forward a different angle you will at minimum be blocked or possibly even lynched. It’s depressing to see.

Does strike me that anyone not pro ukraine is the new anti-vaxxer

[Barnsey]

Following on from your thoughts today @DurhamBorn, looks like things they be a changin'. Now is not the time to be complacent and think history will always repeat itself.

https://www.telegraph.co.uk/business/2022/03/02/case-rethinking-bank-englands-mandate-strong/

It’s therefore worth asking: is an annual inflation target of 2pc even a desirable framework to begin with? If followed to the letter, central bankers are encouraged to react to supply shifts by directly counteracting market price changes. Yes, often they refuse. But what good is an aim that you suspend whenever a negative supply shock hits? Wouldn't it be better to have a mandate that better reflects what the MPC is actually trying to achieve? 

This is one reason a range of economists think central banks should target the level of nominal spending in the economy each year, rather than a 2pc inflation rate.

Trying to hit a level of money GDP consistent with steadily growing aggregate demand would mean that whenever a supply-shock hits, the Bank would not try to counteract the expected pressure on the price level. It would tolerate higher inflation if we saw an energy price spike, or let inflation fall when a technology shock made us all more productive. 

A key benefit of pursuing a steadily rising nominal GDP level is therefore precisely that it wouldn’t compound negative supply shocks by squeezing monetary conditions. Nor would central bankers react to positive shocks by pumping in more inflationary stimulus that prevents the public enjoying the fruits of lower prices when businesses become more productive.

The pandemic era highlights how different the debates around monetary policy would have been had the Bank employed this mandate and it was widely understood. CPI inflation is running hot at 5.5pc and rising - way above the Bank's target of 2pc, hence the intense criticism the MPC faces. 

Yet if instead the MPC were targeting a level of nominal GDP consistent with 4pc annual growth (the average from 1997 to 2019), then at the end of 2021 we’d have considered policy since 2019 to have been insufficiently stimulatory. That's because nominal GDP then was actually below the level we’d have expected given its historic growth.

[leonardratso]

pah all those US regional bank etfs i can find are sans KIID, fuckers.

[HousePriceMania]

16 minutes ago, Barnsey said:

Following on from your thoughts today @DurhamBorn, looks like things they be a changin'. Now is not the time to be complacent and think history will always repeat itself.

https://www.telegraph.co.uk/business/2022/03/02/case-rethinking-bank-englands-mandate-strong/

It’s therefore worth asking: is an annual inflation target of 2pc even a desirable framework to begin with? If followed to the letter, central bankers are encouraged to react to supply shifts by directly counteracting market price changes. Yes, often they refuse. But what good is an aim that you suspend whenever a negative supply shock hits? Wouldn't it be better to have a mandate that better reflects what the MPC is actually trying to achieve? 

This is one reason a range of economists think central banks should target the level of nominal spending in the economy each year, rather than a 2pc inflation rate.

Trying to hit a level of money GDP consistent with steadily growing aggregate demand would mean that whenever a supply-shock hits, the Bank would not try to counteract the expected pressure on the price level. It would tolerate higher inflation if we saw an energy price spike, or let inflation fall when a technology shock made us all more productive. 

A key benefit of pursuing a steadily rising nominal GDP level is therefore precisely that it wouldn’t compound negative supply shocks by squeezing monetary conditions. Nor would central bankers react to positive shocks by pumping in more inflationary stimulus that prevents the public enjoying the fruits of lower prices when businesses become more productive.

The pandemic era highlights how different the debates around monetary policy would have been had the Bank employed this mandate and it was widely understood. CPI inflation is running hot at 5.5pc and rising - way above the Bank's target of 2pc, hence the intense criticism the MPC faces. 

Yet if instead the MPC were targeting a level of nominal GDP consistent with 4pc annual growth (the average from 1997 to 2019), then at the end of 2021 we’d have considered policy since 2019 to have been insufficiently stimulatory. That's because nominal GDP then was actually below the level we’d have expected given its historic growth.

Read as.....Please dont raise interest rates or we're all bankrupt 

P.S. and keep inflation houses prices so a GDP of 4% per annum increase can be had.

These people are sick selfish cunts.

[23rdian]

4 hours ago, Pip321 said:

 

Holding my Poly to the bitter end….a modest bet but still hurts when it wipes out all my other gains. Stop loss, lesson learned 😞

I had mine across two brokers. One does stop losses. Not ideal but better than nothing. But I wasn't able to catch it without one on the other broker.

[Castlevania]

35 minutes ago, Barnsey said:

Following on from your thoughts today @DurhamBorn, looks like things they be a changin'. Now is not the time to be complacent and think history will always repeat itself.

https://www.telegraph.co.uk/business/2022/03/02/case-rethinking-bank-englands-mandate-strong/

It’s therefore worth asking: is an annual inflation target of 2pc even a desirable framework to begin with? If followed to the letter, central bankers are encouraged to react to supply shifts by directly counteracting market price changes. Yes, often they refuse. But what good is an aim that you suspend whenever a negative supply shock hits? Wouldn't it be better to have a mandate that better reflects what the MPC is actually trying to achieve? 

This is one reason a range of economists think central banks should target the level of nominal spending in the economy each year, rather than a 2pc inflation rate.

Trying to hit a level of money GDP consistent with steadily growing aggregate demand would mean that whenever a supply-shock hits, the Bank would not try to counteract the expected pressure on the price level. It would tolerate higher inflation if we saw an energy price spike, or let inflation fall when a technology shock made us all more productive. 

A key benefit of pursuing a steadily rising nominal GDP level is therefore precisely that it wouldn’t compound negative supply shocks by squeezing monetary conditions. Nor would central bankers react to positive shocks by pumping in more inflationary stimulus that prevents the public enjoying the fruits of lower prices when businesses become more productive.

The pandemic era highlights how different the debates around monetary policy would have been had the Bank employed this mandate and it was widely understood. CPI inflation is running hot at 5.5pc and rising - way above the Bank's target of 2pc, hence the intense criticism the MPC faces. 

Yet if instead the MPC were targeting a level of nominal GDP consistent with 4pc annual growth (the average from 1997 to 2019), then at the end of 2021 we’d have considered policy since 2019 to have been insufficiently stimulatory. That's because nominal GDP then was actually below the level we’d have expected given its historic growth.

The above is bollocks

[Castlevania]

16 minutes ago, 23rdian said:

I had mine across two brokers. One does stop losses. Not ideal but better than nothing. But I wasn't able to catch it without one on the other broker.

I spent this afternoon setting up “Asset Resolution” aka a bad bank within my ISA.

[leonardratso]

the only stop loss or limit order that has reliably worked without fail has been on gdax (coinbase pro), ive never seen one bypassed and ignored over the last few years, even when i cant get onto the fooking thing due to volatility or surge.

[Animal Spirits]

8 hours ago, sancho panza said:

Interesting times,we're in the hole for some recent 'Russian' purchases but must say with oil running ,like you say,most of the West is going to have a different set of problems when/if people purchase food/fuel ahead of paying their mortgages.

I think this is a massive can of worms getting opened ref the USD froma historical perspective and quite what the world will look like without the US protecting us in the UK,I don't know.

It's weird,I'm talking to friends at the mo and they're all about the Ukraine(which don't get me wrong, its tragic what's going on) and generally running the MSM line  which is that we need to get in there.As a basement dweller,I'm more aware of the nuance and I msut say,what terrifies me is what comes after the Ukraine if the world order as I've known it for fifty years gets upended.

Will we hear the pitter patter of Chinese boots down the line?

Some of the MSM seems to want to frame this in a simplistic good and evil narrative and turn Putin into a super villain (and thats not suggesting support for any specific actions).

Towards the end of last week, I started to notice some parallels with reporting on Saddam or Gaddafi.

[C-gull]

14 minutes ago, Animal Spirits said:

Some of the MSM seems to want to frame this in a simplistic good and evil narrative and turn Putin into a super villain (and thats not suggesting support for any specific actions).

Towards the end of last week, I started to notice some parallels with reporting on Sadaam or Gaddafi.

Well, they were the last two who tried to sell their oil in something other than the USD...

[The Bear of Doom]

As there has been a lot of discussion about POLY over the last few days, I may as well share my not so exciting journey with POLY.  I bought my first tranche towards the end of September 2020 for around 1720p. It was not a large investment, but I added to it around the middle of January this year at around 1220p. Fortunately I only bought a similar number to the first tranche.

I'm now looking at a reasonably sized loss in my POLY investments  but it is more than covered by gains elsewhere  which shows the benefit of a portfolio spread across a variety of sectors, and companies within each sector.

I do find the Opportunity Cost a bit annoying, as the money invested in POLY could have been better deployed in other targets on my watch list such as BAE, or RIO. However, I would say that argument only applies to the tranche I purchased in January, and even then I wasn't expecting what happened to occur!

[leonardratso]

i wouldnt worry about it, without a kick in the balls now and then you would never get fearful and so wouldnt try and mitigate any risk, until it killed you dead completely, then the hard life starts.

At least you spread it, got to expect some to fail, very early on DB mentioned that some would go bust, the idea is to cover that and stay ahead of the game i suppose. Thats why my car has a spare wheel in the boot, you never know when you might need it.