Deflationary collapse and the Reflation Cycle to Come.

[durhamborn]

3 hours ago, wish I could afford one said:

Nice work DB.  In comparison the return on my total portfolio is down about 1.3%.

To be honest a bit of luck involved.I had been doing a lot of research into stocks to add down the road and a lot of them fell to areas i expected even after a sell off so i started to add them early and had the capital after selling my old portfolio at much higher prices.The likes of Royal Mail and Drax returned 50%.The portfolio, id expect a much lower return the rest of this year,but its a lot better structured now with treasuries etc,so a bit of luck,but il take it.

[chronyx]

Have you sold your Drax yet DB? I remember you were considering a while back

[Barnsey]

And another:

From Bloomberg/Aaron Chan on Twitter @macrodidact

And:

The Daily Shot @SoberLook on Twitter

Doesn't take a genius to see how things are about to get interesting...

 

Edited May 4, 2018 by Barnsey

[durhamborn]

7 hours ago, chronyx said:

Have you sold your Drax yet DB? I remember you were considering a while back

I sold some yes,38%+ in a couple of months and i put it into Imperial in the £23s,iv also just sold a few Royal Mail,i had a lot of them though and they went up over 50% so i reduced the holding to a more reasonable level.I actually put both of those into funds i run for family members as well and have done the same top slicing both.I dont tend to do that very often as i like to hold for very long periods,but the run ups were so steep and fast it was prudent to do so.

Im actually busy at the moment trying to understand trust law for a discrectionary trust.A family member is disabled and just as a plumber in the family gets lumped with everyone's dripping taps i get lumped with that sort of thing.

Edited May 4, 2018 by durhamborn

[chronyx]

29 minutes ago, durhamborn said:

I sold some yes,38%+ in a couple of months and i put it into Imperial in the £23s,iv also just sold a few Royal Mail,i had a lot of them though and they went up over 50% so i reduced the holding to a more reasonable level.I actually put both of those into funds i run for family members as well and have done the same top slicing both.I dont tend to do that very often as i like to hold for very long periods,but the run ups were so steep and fast it was prudent to do so.

Im actually busy at the moment trying to understand trust law for a discrectionary trust.A family member is disabled and just as a plumber in the family gets lumped with everyone's dripping taps i get lumped with that sort of thing.

Thanks DB

I agree, I think Drax, Imperial, RM etc are the exception that proves the rule (And it's a good rule)

Also, that even if you just hold for years it's sensible to follow the movements, even though in your case they probably weren't that much of a surprise as your view is macro.

Hope you get that trust sorted with minimal fuss for everyone.

 

[Craig_]

10 hours ago, zugzwang said:

Yes, so long as the dollar remains the de facto global reserve currency. An exorbitant privilege that Americans have spent forty years abusing. Frankly, it's about time they forfeit it.

You might not need to wait too long...

[Talking Monkey]

10 hours ago, Barnsey said:

And another:

From Bloomberg/Aaron Chan on Twitter @macrodidact

And:

The Daily Shot @SoberLook on Twitter

Doesn't take a genius to see how things are about to get interesting...

 

That is some graph

[reddog]

11 hours ago, Barnsey said:

And another:

From Bloomberg/Aaron Chan on Twitter @macrodidact

And:

The Daily Shot @SoberLook on Twitter

Doesn't take a genius to see how things are about to get interesting...

 

Very interesting, but if you are in the US or UK it doesn't feel like we actually left the 2008 crisis.  What will it feel like when the spike on the right is replicated?

[xiox]

Chinese smartphone market suffers a hard-landing, shipments decline by 21% in Q1 2018

https://www.canalys.com/newsroom/chinese-smartphone-market-suffers-hard-landing-shipments-decline-21-q1-2018

[Barnsey]

47 minutes ago, reddog said:

Very interesting, but if you are in the US or UK it doesn't feel like we actually left the 2008 crisis.  What will it feel like when the spike on the right is replicated?

Indeed, with the prospect of companies using the opportunity to accelerate automation where possible. Finland is now reviewing "better ways" of issuing benefits to those out of work after their failed universal basic income trial so this is a pipe dream for those that will be affected in the next downturn. Yes, corporate debt and leverage is the bigger issue this time, but inevitably that will affect those in the jobs provided.

6000 to go at BT, 1400 potential job losses at Calvetron Brands, and 800 to go at the Virgin Media call centre in Swansea.

If we don't get our IR hike this month, we may not see another until we're out the other end of what's to come. Early 2020 recession for the US (apparently) but we could be staring it in the face come Winter.

Edited May 4, 2018 by Barnsey

[Castlevania]

13 minutes ago, Barnsey said:

Indeed, with the prospect of companies using the opportunity to accelerate automation where possible. Finland is now reviewing "better ways" of issuing benefits to those out of work after their failed universal basic income trial so this is a pipe dream for those that will be affected in the next downturn. Yes, corporate debt and leverage is the bigger issue this time, but inevitably that will affect those in the jobs provided.

6000 to go at BT, 1400 potential job losses at Calvetron Brands, and 800 to go at the Virgin Media call centre in Swansea.

If we don't get our IR hike this month, we may not see another until we're out the other end of what's to come. Early 2020 recession for the US (apparently) but we could be staring it in the face come Winter.

Stagflation here we come!

[wish I could afford one]

As part of the reflation I think DB spoke about increasing spending on defence.  Looks like the US got the memo http://www.bbc.co.uk/news/world-us-canada-44014761 with some baby steps at this point.  Are we about to skip the deflation cycle?  

[Thorn]

Here’s a scenario from here.

Markets are going up. Fed is chasing rather than controlling markets... so up go interest rates. Dollar is going up as people want more, trusty dollars rather than their own Argentina/Turkey/wherever currencies and want to avoid their expected local government bail-Ins as taxes get ridiculously high especially for workers. So many need those taxes now. So few renting-and-not-on-an-electoral-register-because-they-keep-getting-evicted-and-it’s-chaotic workers can keep earning more to pay them more. And you don’t get property taxes because asset-rich, not-getting-evicted, voting Boomers would revolt. 

 People think here, might as well move my assets to US dollar assets their stocks are going up and so my money over there will earn more. 

So I do think international Capital is going to keep flowing to the US and dollars. Mine is at least. Then up go US rates more and dollar gets even stronger.

...then ...Pop... for everybody else, worldwide,  who has borrowed too much in US dollar terms to pay for stuff when CBs all allowed extremely low interest rates.

That Pop might be the Big Pop.

[whome_yesyou]

1 hour ago, Thorn said:

 People think here, might as well move my assets to US dollar assets their stocks are going up and so my money over there will earn more. 

So I do think international Capital is going to keep flowing to the US and dollars. Mine is at least. Then up go US rates more and dollar gets even stronger.

...then ...Pop... for everybody else, worldwide,  who has borrowed too much in US dollar terms to pay for stuff when CBs all allowed extremely low interest rates.

That Pop might be the Big Pop.

Are you implying that the dollar is a safe haven? Or will you be trying to time the jump away from the dollar before the pop? When or what signs will introduce this pop?

[Amateur Idiot]

I'm thinking about opening a new stocks & shares ISA this tax year and was wondering which would be the best one?

I know that not all investments (funds/ETFs/shares/bonds) are available on all ISA platforms. I guess for the purpose of what we've been discussing on this thread I would probably consider variety of investment options as the top criteria (as long as charges are not horrendous!).
 

Also, what is the difference between TLT and IBTL? I've not yet found a platform that offers TLT as an investment option.
 

I'm aware of the broker comparison on the Monevator website.
 

Cheers,
Amateur Idiot

Disclaimer: I'm not an expert. The above comments are just my opinions only and they may not be factually correct. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

 

[Thorn]

1 hour ago, Amateur Idiot said:

I'm thinking about opening a new stocks & shares ISA this tax year and was wondering which would be the best one?

I know that not all investments (funds/ETFs/shares/bonds) are available on all ISA platforms. I guess for the purpose of what we've been discussing on this thread I would probably consider variety of investment options as the top criteria (as long as charges are not horrendous!).
 

Also, what is the difference between TLT and IBTL? I've not yet found a platform that offers TLT as an investment option.
 

I'm aware of the broker comparison on the Monevator website.
 

Cheers,
Amateur Idiot

Disclaimer: I'm not an expert. The above comments are just my opinions only and they may not be factually correct. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

 

It’s upthread- worth reading every single post I think - the BoxSet!

[Thorn]

11 hours ago, whome_yesyou said:

Are you implying that the dollar is a safe haven? Or will you be trying to time the jump away from the dollar before the pop? When or what signs will introduce this pop?

Feels like it. Property is declining and currencies are not standing up to the dollar. Not sure exact signs more just a gradual slide I reckon.

Edited May 6, 2018 by Thorn

[durhamborn]

 

15 hours ago, Thorn said:

Here’s a scenario from here.

Markets are going up. Fed is chasing rather than controlling markets... so up go interest rates. Dollar is going up as people want more, trusty dollars rather than their own Argentina/Turkey/wherever currencies and want to avoid their expected local government bail-Ins as taxes get ridiculously high especially for workers. So many need those taxes now. So few renting-and-not-on-an-electoral-register-because-they-keep-getting-evicted-and-it’s-chaotic workers can keep earning more to pay them more. And you don’t get property taxes because asset-rich, not-getting-evicted, voting Boomers would revolt. 

 People think here, might as well move my assets to US dollar assets their stocks are going up and so my money over there will earn more. 

So I do think international Capital is going to keep flowing to the US and dollars. Mine is at least. Then up go US rates more and dollar gets even stronger.

...then ...Pop... for everybody else, worldwide,  who has borrowed too much in US dollar terms to pay for stuff when CBs all allowed extremely low interest rates.

That Pop might be the Big Pop.

Have you broken into my house Thorn and stole my work).Dollar hit 88 my target so yes we could be on,but i still see a chance of around 94/95 then down to 86 before the dollar starts its big increase.I positioned at my target of sterling at $1.41 from $1.39 up.Could a lack of dollars cause the crisis when everyone thinks there are too many dollars?.Indeed it could.China is already really suffering.

[Talking Monkey]

4 hours ago, durhamborn said:

 

Have you broken into my house Thorn and stole my work).Dollar hit 88 my target so yes we could be on,but i still see a chance of around 94/95 then down to 86 before the dollar starts its big increase.I positioned at my target of sterling at $1.41 from $1.39 up.Could a lack of dollars cause the crisis when everyone thinks there are too many dollars?.Indeed it could.China is already really suffering.

DB what would cause the reversal back down to 86 from the rise to 94

[Bricks n' mortar]

10 hours ago, Talking Monkey said:

DB what would cause the reversal back down to 86 from the rise to 94

+1

EDIT - deleted my interest rate kite-flyer.  I don't buy it myself.

Edited May 7, 2018 by Bricks n' mortar

[chronyx]

https://www.zerohedge.com/news/2018-05-06/paper-gold-market-normalizing-silver-getting-even-more-extreme

Silver in line with your prediction DB, even if via a different path

[Viceroy]

9 hours ago, durhamborn said:

 

Have you broken into my house Thorn and stole my work).Dollar hit 88 my target so yes we could be on,but i still see a chance of around 94/95 then down to 86 before the dollar starts its big increase.I positioned at my target of sterling at $1.41 from $1.39 up.Could a lack of dollars cause the crisis when everyone thinks there are too many dollars?.Indeed it could.China is already really suffering.

DB - GBP currently 1.35...do you see GBP having one last shot up at 1.40 range if/when the DXY falls to 86?

I spent hours over the weekend re-reading this fantastic thread from the beginning - those cycle charts of DB have made some great calls - well done and thanks for sharing your knowledge!    

[Viceroy]

On 06/05/2018 at 11:30, Thorn said:

So I do think international Capital is going to keep flowing to the US and dollars. Mine is at least. Then up go US rates more and dollar gets even stronger.

as a way to gather my thoughts:

..So as the $ gets stronger and peripheral countries start to go under due to a mountain of un-payable debt, capital flows to the US as a 'flight to safety' and into tangible things like equities. US Stock markets go up - especially the DOW as it's perceived as the 'trophy' and is indicative of international money-buying based on currency,  rather than domestic US institutional buyers who traditionally go for the broader S&P, whilst speculators/retailers opt for the NASDAQ https://www.armstrongeconomics.com/markets-by-sector/stock-indicies/sp-500/the-dow-v-sp500-v-nasdaq-whats-the-difference/

https://www.armstrongeconomics.com/armstrongeconomics101/training-tools/us-share-market-broad-overvaluation-index-one-of-the-best-leading-indicators-we-have-ever-created/

The strong US dollar and bubbling stock markets means the Fed fights this with ever-rising interest rates.  This effectively blows up their own massive debt pile - people wake up and realise it's impossible to ever pay it back, sniff a sovereign debt crisis on the horizon and start pulling out their money from US Govt bonds and into tangible assets - like more equities, gold, art, land.. houses too but as they will be taxed hard, this cycle won't see them being a great store of value..(DB has written more on this, that house prices will rise nominally again after a time, but will not keep up when adjusted for inflation).  https://www.armstrongeconomics.com/armstrongeconomics101/basic-concepts/what-are-tangible-assets/

The theory I've read is that Europe goes down first, then Japan and USA last.

[Paul77]

19 hours ago, Amateur Idiot said:

I'm thinking about opening a new stocks & shares ISA this tax year and was wondering which would be the best one?

ig.com is the cheapest and for some reason doesn't appear in many ISA stock & shares comparison...

[durhamborn]

10 hours ago, Talking Monkey said:

DB what would cause the reversal back down to 86 from the rise to 94

Yen probably.My main dollar focus was for sterling and that hit my target of $1.41.I started to add dollar assets at $1.39.(i already had a small amount of treasuries before that and some gold miners priced in dollars).I wont be doing much work on currencies for a year or so im mostly interested in liquidity at the moment and if we get a big debt deflation before the next cycle.The next cycle is a reflation that favours industry/energy over the consumer,im 99% convinced of that,its just the jump to it that concerns me most.