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Flat Bear

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Everything posted by Flat Bear

  1. Harsh, but quite fair. When we talk about absolute usless PMs it is very hard to look past Gordon (is a moron) He has to be the worst of all time and is the reason the banking system has become politically controlled. You can have the posh people socialist Brown or the working class people tory Major. Hobsons choice.
  2. “ECONOMIST” Why are so called economists so stupid? Is it a prerequisite you have to have a lobotomy? I realize that economics is not a science and is more akin to art but surely there must be some degree of logical thought process? Looking at other viewpoints I have been listening to the totally absurd Cathie Woods. What a really stupid woman. She starts off by talking about the government bond market! Cathie “THERE IS NO BOND MARKET”! The market finished about 20 years ago. She talks about yields FFS. Cathie “BONDS ARE NOT PURCHASED FOR YIELDS; THEY CAN EVEN GO NEGATIVE” Why do people buy these awful bonds and WHY? Just the fact of holding to shore up their balance sheets to facilitate more borrowing or with foreign holders getting a bigger slice and ultimate control of a country. She starts out by saying QE is inflationary? NO Cathie QE is deflationary and has been proven to be so by the biggest global debtor, Japan. Directly or indirectly the Bank of Japan owes most of the government debt. It has used QE to suppress interest rates to lower maintenance of the debt. Which as a side effect lowers money inflation. The 5-year yield on a Japan bond is around -0.13 (minus) but you get a hefty 0.66% on 30-year bond. As you can see there is no market in bonds, in Japan or any other major western country. The crux of her arguments is that we will see deflation not inflation over the short to medium term. She makes the semi valid point that because we have all been locked up for so long demand for manufactured goods has increased considerably whilst the service sector has shrunk significantly. She calculates (source unknown) that the goods side of the economy (US) has increased from the “normal” 30% of the economy to 41%. She believes this will go into reverse when the economy “opens up” and as a result companies will have oversupply and prices will collapse as a result. She points out oil as an example and believes oil will fall to $12 USD a barrel because of lack of demand. OK, maybe it will happen to some degree, but she is missing out all the other more important factors. 1. Prices and Costs in China, where everything is made has gone up and will continue to go up. 2. Internal growth and demand in China are affecting exports to the west. 3. Global population is growing fast. At around 8 billion today another billion in 10 years’ time. 4. Demand from 3rd world and emerging market is growing fast. 5. Global shortages of Basic raw materials will push prices up and up. 6. The “temporary” breaking of many supply chains is in fact permanent. 7. People will go out and spend their money and will pay much higher prices for everything when they do so. 8. The retail outlets and companies that have weathered the storm, will increase prices to a level they believe is sustainable. 9. Wages are already taking off and it will continue to happen irrespective of employment levels. 10. If oil goes to $12 a barrel who is going to bother selling it? Is the cost more than production? There are lots more reasons.
  3. Hello Warlord Simon99 makes some very valid points, and he could well be correct in his final analysis and the “powers that be” might once again find a way to move the goalposts and not play the game properly. Why not? It is important to me that threads do not become echo-chambers where we only hear what we want to hear. I would like to think I am here to learn something. It is very important that we ask the right questions if we are to get any real answers. Inflation I agree with your assessment on inflation as well as your lack of confidence in the major western currencies. I think it is quite frightening as this could put the western world in a very bad place, where none of us want to be. The central banks have certainly been playing for keeps without any safety net and if things do go wrong the fallout will affect everyone everywhere. That is very much what simon99 was saying as they won’t give up and will keep rates low as the consequences are just too bad to contemplate and their lives actually do depend on it. OK, so inflation (CPI) does go to around 8.5% to 9.5% by the end of 2022. I think this is quite plausible? and the Fed will have already run worst case scenarios and looked at what they could do. So, what are they likely to do in this event? It is likely, as simon99 says, that they will try to keep the base rate as low as possible longer than we can imagine. The big US banks that have been growing very quickly over the last 18months on the back of QE and the pandemic could well be left out to dry and a second, and bigger, banking crisis would be the result. This would give the “powers that be” the excuse they need and has every inflationary period in history has ended with a slump. This could well be the biggest depression in history, where risk aversion is the new mantra, and could well be looked back in hindsight 150 years from now as a totally insane period. This is only one of thousands of scenarios and anything can happen. We must be very careful what we wish for.
  4. Rents in Reading, Berks are down quite considerably. Many of my staff are finding better accommodation and relatively easily, prices are around 20% less. It is mostly due to Eastern Europeans returning home but possibly also due to lack of university student demand. Any way prices are definitely down for the first time in a very long while. I take it the situation would be the same in most of the UK?
  5. Yes I take your point. I have been on the forum about the same time as you lurking from around 2002ish. If you recall I predicted the last small correction to the month and foresaw the collapse of the banks. I hopefully managed to persuade many icesave customers to get their money out before the collapse. I did not see the political take over of the markets however and still am bewildered as to how they managed to take interest rates down to zero and pump so much money into the system without any consequences at all? So you are correct on this count. BUT is it possible this is the time these actions finally do have consequences? The problem with the world economy is that is not controllable and the central banks could well suddenly realize they are not Gods but just a lot of very naughty boys.
  6. I understand the caution, but the facts are the biggest economy in the world is overheating and inflation is already at a 13 year high and it will go higher. Yes, the central banks will do everything they can to keep borrowing to a minimum but unfortunately for them global economics and markets have wills of their own, political interference cannot control the markets, long term. Why would they think it is only temporary? there is no reason to think this. Most people either side of the pond now believe prices will continue to go up. Business has already seen this, and it has already started to impact many "consumers". Events, things we think might happen, things that we have no idea will happen, will change things going forward and central banks are powerless and in precarious positions. After saying all that I do agree with you and think they will leave rate rises till as late as they possibly can which ironically will make the situation worse.
  7. Shock surge in US inflation heightens rate rise fears Bets surge on earlier than expected action by the Federal Reserve as inflation hits 13-year high of 5.4pc in June ByTom Rees13 July 2021 • 4:08pm A shock jump in US inflation to its highest level in 13 years stoked fears of price pressures boiling over, turning up the heat on the Federal Reserve’s rate-setters. Fears of the world’s biggest economy overheating were fuelled by the consumer price index (CPI) unexpectedly jumping from 5pc to 5.4pc in June - the largest rise since 2008. Forecasters had expected the cost of living gauge to cool slightly to 4.9pc but price pressures continued to build, casting more doubt on the Fed’s view that high inflation will be temporary. Prices rose 0.9pc compared to May, while core CPI - which strips out more volatile food and energy costs - leapt to 4.5pc year-on-year, the highest since 1991. US inflation has surged this year as the economy reopens and supply constraints hit The US are 6 months to 9 months ahead of us. Is it even possible the the Fed could raise rates without a response from the BOE? No it is not really a possibility and the BOE will have no choice but to respond. This is where we could see the Euro begin to fail. It will all play out over the next 12 months or so.
  8. If you think the Delta strain is frightening Just wait till we get the Omega Strain!!!! I may read the book?
  9. Yes It is very difficult to give a too precise figure for any particular month. My prediction guess was between 2.4 to 2.6% a few weeks ago. In coming to this conclusion, I had taken into account the probable massaging of figures but if you underestimate one month this has to be compensated the following or the one after that. Generally, it seems businesses have seen very high inflation from every angle but it has not yet trickled down to consumer prices to any real extent. I will have a guess at 2.5% on the nose for a relatively small increase. The BOE could live with this quite easily and continue to pass it off as transitory, passing any decisions into future months. It would be good to see other predictions and their accuracy.
  10. I think a 2% rise in the BOE base rate would have more of an impact than you imagine. This would bring many mortgages into the range 4% to 6.5% which would treble many mortgages. This would have an effect on house prices for definite although maybe not a "crash" depending on your definition. A 3% to 5% rise would be in the range to see a substantial correction. Anything in a shortish timeframe higher than this you have your "crash" for real. All this, subject to timeline and "real" inflation where nominal price falls could be less.
  11. LOL I take it you are joking right? Just been informed our next container (shipping) will be $9300 USD. I honestly did not think it could not get any worse. The delays and availability is getting very, very bad. I do not see how it can continue like this without massive repercussions. Feedback from both Taiwan and China is that the situation will not improve significantly till after the new Lunar year (February) They seem to think inflation is a given and prices are rising in all materials and production. This must be tempered with the fact they sell to me so have an interest in higher prices.
  12. If I read your question correctly “If more people gain from very high house prices than those that lose from it, is society* better off” Well obviously not Do I really need to explain? You totally disenfranchise a sizable proportion of your population so that a sizeable elite home owning class can exploit them and thus gain by renting or other means to the disenfranchised. There is no other way this home owning majority can actually gain from this situation unless it is very short term where there is an extreme volatile market and then only a small proportion gain (the bankers) I think this is very obvious and everyone would end up worse off in so many ways. A more difficult question though if thought through logically “If a very large proportion of people gain from slavery than those that lose is society better off” I think you can very well argue slavery is a good thing for those that gain, a no brainer. It would only be the scruples many people have and the basic human empathy. Those that lose it would not really matter to much as they could be forced to comply whereas in the higher house price analogy they could and would cause a lot of trouble and the gain for society as you put it would not be good. If you look back at the last slave trade and when it was questioned the moderate sensible view was to carry on as the economic fallout would be catastrophic. It took some very brave souls to go against it. I personally would say exploitation of one group in society against another group is always a bad thing no matter what the percentages are or the denominations. But hey that is just me.
  13. I will try and get more info for you, the info came from a local ASDA employee. These trunker drivers tend to drop off at around 3.30am till 5.30am. I have the same scepticism as you but we are in very strange times and these particular drivers really are indispensable We are having major problems getting our own pallets collected (Berkshire area) and drivers are complaining on longer hours. I do not know how companies are finding ways round the Tacho legal requirements? The agency drivers are getting £24 ph I hear from the regular drivers (general hauliers) and they still can not get enough, but obviously this is only hearsay. It seems all drivers are in demand but the HGV drivers are in most demand again from what I hear. Maybe this is very localized? and other areas in the UK are not affected in the same way? Being in the industry you will know much better than me and your information will be more accurate, it will be interesting to hear from you in the coming weeks if demand and pay offers improve even further. But, as you know, the grass is always greener.
  14. Probably more than that taking into account everything probably around £80k which is quite a lot in anybodies reckoning. I realize all the costs and difficulties of the job and the traditionally very low pay, but I would suggest now worth getting into if rates do stay the same. They probably wont in the long term as supply improves and demand drops off though.
  15. I think drivers generally tend to get lower rates of pay. I understand ASDA are now offering their HGV drivers £35 per hour to retain them during this crisis of driver shortages which I also understand is a considerable increase in their pay.
  16. Hello Dorkins You keep us in touch with reality with your posts like this one, but are you playing devil's advocate or do you really think prices are going down or staying roughly the same?
  17. ??? Exactly what I am expecting. Why PMSL ? I do not find it so funny I am not getting into Bitcoin as this has no real fundamental backing. I am personally looking at investment in commodities and selective equities, but most of my investment is in structural improvements in my own business. Currency speculation is a difficult one. The Euro, USD, and GBP are all being trashed but what smaller currencies/economies can you safely invest in? My crystal ball is very fuzzy and it is very difficult for me to predict what and where it will be effected most and by what degree. It does not look good. The only other alternative to all this is propery and thus the relentless rises.
  18. Good Price? Everything is relative. Less than one year ago I was paying less than $1000 dollars for a 20ft container. Last October I paid $1200 dollars and was annoyed at the increase. Move forward to this morning and I have just paid $7400 dollars and I am very happy about this because generally they are now $8000 plus. In the end everything will work its way through the system, and I would expect freight prices to come back down to realistic levels, but at what level the new realistic market price will end up I can only guess. The time frame is even harder to predict.
  19. I think this is at least partly true. But no matter what you pay there simply is not enough drivers, especially HGV all classes to go around. It has all happened so quickly and we are all finding it difficult to keep our business's going at the same time as just managing to satisfy demand. I have had an employee hand in his notice today and our pallets were not collected till very late. The answer all round is to raise our prices and not by the 7 to 10% everyone is doing but by the 25% plus that is really needed to maintain our profit margins and increase wages/investment etc. We are just coming onto the second round of price increases this year for some companies. I had originally tried to last the year without a price increase but will be increasing on 1st July by 15% on average. It will be interesting to see if it detrimentally affects turnover. If it does not, why did I not increase by more? Elasticity of demand? We are in very strange times.
  20. IF prices are rising as quickly as I am seeing in my business I will be keeping a close eye on the fuel prices at my local pump. They have risen slightly recently but well within the standard deviation and are approx. 1.30 petrol 1.34 diesel. If my analysis is correct with the sudden increase in demand at the end of July I would expect prices to be on their way up to, or at 1.50. Around a 15% rise by the end of August (yes that quick) which would put it in line with the increases we have already seen in other consumables. This will be a good barometer for me. I note that food prices are still low and I can not see any real increases, but this may well be my own perception. Again will be looking at anecdotes from other posters and the small selection of foodstuffs we buy over the next few months.
  21. We could well have the paradox of rising inflation which will by definition increase the prices of nearly all the things we need, whilst at the same time decreasing the price of houses. Everything goes into reverse. You know the reasoning why. This is now quite likely. I think?
  22. I would guess at flatling. Up a bit down a bit. This could go on for a year or more. The only reason I can see for a downward movement is affordability. Increasing interest rates due to inflationary pressures would be the biggest factor, this would take time as the denial stage always takes its time and before sentiment slowly starts to turn. The denial stage took around 2 years in the last correction phase. If there is to be a correction it would probably then be around 2023 to 2026 in reality. Depending on inflation, economic outlook and speed this correction could be real but with maybe a small nominal or no nominal falls at all.
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