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durhamborn

Deflationary collapse and the Reflation Cycle to Come.

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7 hours ago, zugzwang said:

In physics the gas molecules in the air don't suddenly migrate to one corner of a room (although statistically they could.)

It feels a bit stuffy in here now you mention it. NEED AN ECONOMIST NOW

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UK Retail Sales showed the biggest year-on-year fall ever in the history of the BRC Retail Index today. -4.2% vs the predicted -0.7%. It’s even more negative than during the depths of the global financial crisis!

So that’s both the Halifax HPI number AND UK Retail index that have come in much much more negative than predicted! 

315A89CB-4528-4544-BCD9-2E69D1B136C0.jpeg

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How to get people to spend retail?......spread the cost over several easy monthly payments, doesn't sound much except many low easy payments add up to one high huge payment.......paying yesterday's spending with tomorrow's earnings.....a line at some point has to be drawn.

Only heard the other day, if interested we can fix the price for you today?......so are they saying the price will now be increasing in the near future?.....who do they think will be paying more tomorrow, who can afford to pay more......who will want to pay more....who wants it anyway?😉

Edited by winkie

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3 hours ago, SOLZHENITSYN said:

UK Retail Sales showed the biggest year-on-year fall ever in the history of the BRC Retail Index today. -4.2% vs the predicted -0.7%. It’s even more negative than during the depths of the global financial crisis!

So that’s both the Halifax HPI number AND UK Retail index that have come in much much more negative than predicted! 

315A89CB-4528-4544-BCD9-2E69D1B136C0.jpeg

Can the BoE and UK Gov come up with some policies to prevent future spells of 4-day snow storms? The Earth clearly has lots of questions to answer. Can it comes before a select committee?

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Vodaphone have been spending:
 

Quote

 

Vodafone Group has agreed an €18.4bn (£16.1bn) deal to buy Liberty Global's operations in Germany, Czech Republic, Hungary and Romania.

Vodafone said adding Liberty's cable TV and broadband services to its mobile operations would create the first truly converged pan-European company able to take on former incumbents like Deutsche Telekom

https://uk.finance.yahoo.com/news/vodafone-targets-european-domination-16bn-064350966.html

 

Share price up 1% at the moment

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DB, its just coming up to one year since you started this thread. What in your view are the important changes since a year ago? (if any).

Has anything changed your view since a year ago?

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3 hours ago, Errol said:
Brent crude at 3.5yr highs.

If the Israelis are seeking to widen the covert war they're presently fighting with Iran and Syria over the Golan Heights (as appears to be the case) then $200 bbl isn't out of the question, especially if the Iranians start throwing heavy metal at Saudi Arabia by way of retaliation, as they're almost certain to.

 

 

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On 08/05/2018 at 02:25, Viceroy said:

Thank you DB!

It would be interesting to know if your charts can predict a time frame, altho you say cycles can get stretched etc?  Armstrong's private blog calls for the major high for the US dollar as 2020/2021 timeframe.  I think you forsee DXY 120 and TLT 150 - could it be then?  Perhaps that is when the monetary system breaks, inflation takes off and people start to run towards commodities to put their wealth in, before it gets inflated away.  You've written that you see mid 2020's as a shining time for precious metals.

I read Armstrong for years (still do occasionally, mostly as a an interest to see how bad grammar and spelling can get before text becomes illegible). Not a single prediction is provided for without a conditional verb. Precious metals you'd be better flipping a coin to buy or not to buy based on Armstrong's work. How anyone takes it seriously I do wonder!

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7 hours ago, Pitchfork said:

DB, its just coming up to one year since you started this thread. What in your view are the important changes since a year ago? (if any).

Has anything changed your view since a year ago?

Nothing has changed on the macro front.The dollar hit target and liquidity has started to turn.That is setting the seeds for a debt deflation.We are already seeing inflation eat into incomes and margins.Its highly likely we are at the top,or very close to the top of the earnings cycle in the US.A huge number of UK equities ended up down 50%-70% from their highs at the start of the year and were areas to start to build positions.Many have already recovered by 20%,some 50%.They will be hit in a sell off,but likely not to extreme levels.The US however will probably see big falls.

The only item not on target is gold (and silver).Id expected it to go from $1200 to $1450 at this stage,but only got to $1360 area.Still a great performance,but not enough to get the miners going much.I still think $1450 to $1550 is likely,but its proving hard to get out of its consolidation.Interesting to see if it can get going through the summer.

House prices are toast.The south will see big falls once this gets going.Leveraged BTL and highly leveraged consumers are in for a decade from hell.

The consumer will slowly fall as a percentage of the economy and industry and production will gain,once we get going into the next cycle.Capital will flow into those areas,not into houses.

 

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3 hours ago, SillyBilly said:

I read Armstrong for years (still do occasionally, mostly as a an interest to see how bad grammar and spelling can get before text becomes illegible). Not a single prediction is provided for without a conditional verb.

I totally get that 😁...so hard to decipher!

I emailed him this week to ask if there would be a last bull in Bonds and his direct reply is  “the high in bonds is in as of july 2016. We had the first decline and our countertrend reaction. We in  crash mode now”

DB’s analysis is also fantastic, very thought-provoking, a great call on currency and I have learned a lot from this thread. Thx for all the input guys. Hopefully people reading this thread will be able to protect their savings through it all.

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8 hours ago, durhamborn said:

Nothing has changed on the macro front.The dollar hit target and liquidity has started to turn.That is setting the seeds for a debt deflation.We are already seeing inflation eat into incomes and margins.Its highly likely we are at the top,or very close to the top of the earnings cycle in the US.A huge number of UK equities ended up down 50%-70% from their highs at the start of the year and were areas to start to build positions.Many have already recovered by 20%,some 50%.They will be hit in a sell off,but likely not to extreme levels.The US however will probably see big falls.

The only item not on target is gold (and silver).Id expected it to go from $1200 to $1450 at this stage,but only got to $1360 area.Still a great performance,but not enough to get the miners going much.I still think $1450 to $1550 is likely,but its proving hard to get out of its consolidation.Interesting to see if it can get going through the summer.

House prices are toast.The south will see big falls once this gets going.Leveraged BTL and highly leveraged consumers are in for a decade from hell.

The consumer will slowly fall as a percentage of the economy and industry and production will gain,once we get going into the next cycle.Capital will flow into those areas,not into houses.

 

Thanks DB a nice summary of where we are at.

A nearby house has been on the market for a year now. Asking price just dropped again by another £10k, making a total of £30k price reduction from initial price of £370k. It's a nice area in Essex with fast trains into London. Houses round here always used to sell within days. Certainly starting to see a change.

In other news, Iran has fired rockets at Israel. Could this escalate and become a trigger event? At the very least it may push up oil prices even further.

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1 hour ago, Pitchfork said:

Thanks DB a nice summary of where we are at.

A nearby house has been on the market for a year now. Asking price just dropped again by another £10k, making a total of £30k price reduction from initial price of £370k. It's a nice area in Essex with fast trains into London. Houses round here always used to sell within days. Certainly starting to see a change.

In other news, Iran has fired rockets at Israel. Could this escalate and become a trigger event? At the very least it may push up oil prices even further.

It looks like the neocons in the Trump administration have given the Israelis a greenlight to attack Iran. The Iranians are more than capable of defending themselves, however. Potentially, a hot war that could last for months, or even years. Oil prices are going to the Moon and beyond.

Trigger event for a worldwide slump? Of course! Debtors beware. 😱

Quote

Brent crude futures, the international benchmark for oil prices, hit their strongest since November 2014, at $77.89 per barrel shortly before 0700 GMT on Thursday, up 0.9 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures also marked a November-2014 high, at $71.84 a barrel, before edging back to $71.78 per barrel. That was-still 0.9 percent above their last settlement.

In China, which is Iran’s single biggest buyer of oil, Shanghai crude futures posted their biggest intra-day rally since their launch in March, rising more than 4.5 percent to a dollar-denominated record above $75 per barrel.

Analysts had little hope that opposition to the U.S. action would prevent sanctions from going ahead.

“Europe and China will not fight against the U.S. sanctions. They will grumble and accept it. There is no one who will realistically choose Iran over the U.S.,” said energy consultancy FGE.

“We believe the previous 1 million bpd limit for exports (imposed during previous sanctions) will be reimposed. As before, it may take several rounds of reductions to reach target levels,” FGE’s founder and chairman Fereidun Fesharaki wrote in a note.

“Oil prices will certainly move up, and $90-100 per barrel prices may again be on the cards,” Fesharaki said.

U.S. bank Goldman Sachs said renewed sanctions and risks to supplies elsewhere, especially in Venezuela, meant there was a strong possibility of higher prices than the bank’s summer Brent forecast of $82.50 per barrel.
 

 

 

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10 hours ago, durhamborn said:

The consumer will slowly fall as a percentage of the economy and industry and production will gain,once we get going into the next cycle.Capital will flow into those areas,not into houses.

 

What about wage inflation? If money flows into industry and production doesn't that mean more people working and earning better money than being stuck on benefits and part time jobs?

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1 hour ago, zugzwang said:

“Oil prices will certainly move up, and $90-100 per barrel prices may again be on the cards,” Fesharaki said.

Quote
On 04/01/2018 at 21:19, chronyx said:

I keep waiting for a leg down but it seems to be incrementally but steadily going up. I wonder If this is it for DBs $1450 call 

I think DB may well have called this right, Gold rising in price as you would expect as inflation is picking up around the world in the real economy. But Gold is the tail of the beast, crude oil is the head. It's the oil price that will rise up and then crash this economy, with many calls for a future price of $15 a barrel. (What price then for the BP's, Shell's of this world?) At that point will we see Gold at $800???

Personally I can't read these distorted markets, throw in Cryptos and the picture is even cloudier! I believe in Gold, it exists, it doesn't require a network to exist and you can hold it in your hand. I will always hold some and probably some of the companies that do the "proof of work" to mine it out the ground, it is the money of last resort.

I don't believe that the economy can withstand +$100 oil for long.....

Was $1360 the peak for gold before the deflation???

Edited by Noginthenog

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1 hour ago, Democorruptcy said:

What about wage inflation? If money flows into industry and production doesn't that mean more people working and earning better money than being stuck on benefits and part time jobs? 

Not yet!

What about wage inflation? If (printed QE) money flows into industry and production doesn't that mean more people working and earning better money than being stuck on benefits and part time jobs? 

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Just now, Noginthenog said:

I don't believe that the economy can withstand +$100 oil for long.....

Brent crude has exceeded £55bbl on just three occasions: 2008-9, 2011-14, and presently. The first two times the economy was either in recession or very close to it (quarters of contraction alternating with quarters of growth.)

$100+ oil = £80bbl.

Game over.

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36 minutes ago, zugzwang said:

Brent crude has exceeded £55bbl on just three occasions: 2008-9, 2011-14, and presently. The first two times the economy was either in recession or very close to it (quarters of contraction alternating with quarters of growth.)

$100+ oil = £80bbl.

Game over.

Some funds are reportedly betting on $150 oil. Which would be interesting.

Edited by Errol

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I am not so bullish on USD or treasuries so here's the positioning I am moving towards as fast as I can:

1/2 Crypo (XMR). Got. Volatile, obviously.

1/4 Gold (Bullionvault, Zurich). ASAP. I have never been a gold bug, but I think it's time to get some exposure.

1/8 P2P Lending (Lending Works). ASAP. Regular income.

1/8 Shares and Funds (Interactive Investor). Got. Mostly cheap indices and renewable energy; for the long haul.

May all your boats ride out the storm.

Cheers, Q

Edited by Quicken
spelling

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2 hours ago, Quicken said:

I am not so bullish on USD or treasuries so here's the positioning I am moving towards as fast as I can:

1/2 Crypo (XMR). Got. Volatile, obviously.

1/4 Gold (Bullionvault, Zurich). ASAP. I have never been a gold bug, but I think it's time to get some exposure.

1/8 P2P Lending (Lending Works). ASAP. Regular income.

1/8 Shares and Funds (Interactive Investor). Got. Mostly cheap indices and renewable energy; for the long haul.

May all your boats ride out the storm.

Cheers, Q

Hi Q - interesting re cryptos - I am not sure about them - not sure what you would get back if they went kaput- can I ask why XMR as opposed to other cryptos?

 

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9 minutes ago, Thorn said:

Hi Q - interesting re cryptos - I am not sure about them - not sure what you would get back if they went kaput- can I ask why XMR as opposed to other cryptos?

 

 

You won't get much back if they fall out of favour. Caveat emptor. Two of XMR / Monero's main attractions is that it's a fungible and private. 

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1 hour ago, CanAffordWontPay said:

You won't get much back if they fall out of favour. Caveat emptor. Two of XMR / Monero's main attractions is that it's a fungible and private. 

Has good devs on it as well and a strong sense of community.

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Centrica was down nearly 6% yesterday 

Rick Haythornthwaite, who was appointed in January 2014, announced on Tuesday that he would step down within 12 months, at a time when British Gas and the other “big six” suppliers contend with intense political pressure over “rip-off” energy bills.

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