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Deflationary collapse and the Reflation Cycle to Come.


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21 hours ago, TJHooker said:

Got a grand and a half's worth at 0.35 as a ride it out until the end punt, should find out by Xmas if its a winner or loser.

What Telcos are you looking at DB, was looking at MTN to hold for the long term.

 

To be honest only the big boys like Vod and BT.Most of my portfolio is for income and then some where i see growth (ie PMs etc).I pretty much retired at 39 apart from small business where i make the tax allowance (i refuse to work more than two or three hours a week).Most years i re-invest dividends etc,but im set up so if i need to take all or some of them i can.Im actually thinking of taking a few this year as my business might only come in at £9k profit not £12k as i juggled it a bit,will be back to tax allowance next year.My investing makes far more than my business,but i dont really take it yet as iv still got 20 year to state retirement age.Another one or two years though of keeping the business ticking over and it will then be just a bonus as i could start a capital run down then if needed as i plan to run down all capital leaving only £30k by the age of 80 (if im still here).I intend to run down at £300 a week until 68 then £100 a week from 68 once state and small final salary pension kick in.

Over the years iv made the most money buying bigger companies at the right time (when they are hated/out of favour).Its incredible what compounding at about 12% can do.

MTM has many risks as im sure you know.However it has a big slice of its income coming from Nigeria,and in a reflation i expect Nigeria to do well (oil) and would be happy to hold it as a small holding.I hold some South African gold miners and the political risk is very real and it has to come into how much to hold in such an area.

Edited by durhamborn
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Rather than put my thoughts in other threads about how i see the end of this cycle playing out i thought a thread dedicated to this would be a much better idea.Many other posters here have some great

How convenient.

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21 hours ago, durhamborn said:

 

2.Purely the numbers.The debt now points to massive QE needed,and that points to people losing faith in Fiat at the end of the next cycle.Its a long way away and could be way off what happens,a lot depends on how they deal with the debt deflation happening now.

 

Hi, would you define a long way off for massive QE as about 8-10 years away?

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1 minute ago, reddog said:

Hi, would you define a long way off for massive QE as about 8-10 years away?

Possible within two years,a lot depends on if we see a deflationary bust or not.We also have a Fed that might not be as open to mass QE as before and might hold off.The strains are all around,the Fed tightening again in June would add to them.

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https://www.telegraph.co.uk/business/2018/05/26/energy-firms-brink-collapse-reveals-report/

Quote

 

Half of Britain’s energy suppliers face an existential risk after the “Beast from the East” tore through the balance sheets of the industry’s small players.

Thousands of energy customers could be left in limbo due to a high risk that around 10 of the most fragile suppliers are on the brink of going under.

Many hundreds of thousands more bill payers face the risk of sudden ­energy tariff hikes because almost 40 suppliers may be forced to squeeze their customers to survive.

 

This should shake the energy market up a bit.

Tony Blair was famous for saying "Education , education , education"

The next PM had better prepare for "Infrastructure, infrastructure, infrastructure"

Edited by Lord D'arcy Pew
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31 minutes ago, durhamborn said:

Possible within two years,a lot depends on if we see a deflationary bust or not.We also have a Fed that might not be as open to mass QE as before and might hold off.The strains are all around,the Fed tightening again in June would add to them.

That is not my idea of a long way off!!  I am definitely feeling some bad vibes where I work (work indirectly for a bank not in the UK).  Cost cutting at every turn!

 

Was hoping for a bit more time to get my house in order. (Although I know I am a lot better placed than most, who haven't got a clue what is coming)

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1 hour ago, durhamborn said:

To be honest only the big boys like Vod and BT.Most of my portfolio is for income and then some where i see growth (ie PMs etc).I pretty much retired at 39 apart from small business where i make the tax allowance (i refuse to work more than two or three hours a week).Most years i re-invest dividends etc,but im set up so if i need to take all or some of them i can.Im actually thinking of taking a few this year as my business might only come in at £9k profit not £12k as i juggled it a bit,will be back to tax allowance next year.My investing makes far more than my business,but i dont really take it yet as iv still got 20 year to state retirement age.Another one or two years though of keeping the business ticking over and it will then be just a bonus as i could start a capital run down then if needed as i plan to run down all capital leaving only £30k by the age of 80 (if im still here).I intend to run down at £300 a week until 68 then £100 a week from 68 once state and small final salary pension kick in.

 Over the years iv made the most money buying bigger companies at the right time (when they are hated/out of favour).Its incredible what compounding at about 12% can do.

 MTM has many risks as im sure you know.However it has a big slice of its income coming from Nigeria,and in a reflation i expect Nigeria to do well (oil) and would be happy to hold it as a small holding.I hold some South African gold miners and the political risk is very real and it has to come into how much to hold in such an area.

As they've a foot in many African nations i'm hesitantly of the belief that at some point the region is going to be the next area to tap into for dirt cheap unregulated labour (even if its the Chinese taking advantage of it). Hence growth will come elsewhere.

Got to be a time where those in power in African nations are persuaded that its better to take a 10% slice of something than a 100% of nothing.

I looked into BT but isn't its pension deficit and debt levels an issue to stay away?

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On ‎26‎/‎05‎/‎2018 at 08:46, durhamborn said:

Some of his calls are similar to mine,but some different.I see a deflation before the reflation cycle.He also thinks we are going straight to 10% rates,i dont.One last leg in the bond bull market for me first,then a slow grind higher in rates.I agree on 10%+ by 2025 .A lot of what we are seeing ahead depends on central bank action though.

 

DB I was thinking of how could we go straight to a reflation, I cannot see how it could be done. As things would have to turn down really really badly before the government would print the amounts you mentioned. Under what scenarios could we go straight to a reflation DB

Also Armstrong mentions the Dow continuing its upward trend once again with high yield debts starting to look shaky and the top of the earnings cycle possibly being in now, I'm trying to understand how could the DOW march higher and if it did how much higher, since the correction earlier in the year it has struggled to get over 25K let alone close to the all time high again

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Armstrong's jump to 10% interest rates pertains to Europe and their bond market melt-down. Once the ECB stops buying no-one else will touch EU bonds with a barge pole.  

In this video about World Interest rates https://www.youtube.com/watch?v=xnvHZGTGu2g (Martin Armstrong Q&A Discussion with Michael Campbell of "MoneyTalks" Radio from the 2017 World Economic Conference) he says USA's bond market will melt down more slowly than other places to begin with.
At 1min30secs he gives a Socrates signal for US Bonds and when to short them - it's when the US Fed Reserve Discount Rate closes above 2.9 (currently at 2.25% - a year ago it was 1.25%). The EU has made it illegal to short European Bonds.
 
He's also given the 2.25% figure in his blog: 
"..We have a very RARE Double Monthly Bullish Reversal at 2.25%. A monthly closing above that level and 5% will be seen in a matter of months..."
 
More on interest rates shooting up - https://www.youtube.com/watch?v=UhyDsRqTAN8
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17 hours ago, Talking Monkey said:

DB I was thinking of how could we go straight to a reflation, I cannot see how it could be done. As things would have to turn down really really badly before the government would print the amounts you mentioned. Under what scenarios could we go straight to a reflation DB

Also Armstrong mentions the Dow continuing its upward trend once again with high yield debts starting to look shaky and the top of the earnings cycle possibly being in now, I'm trying to understand how could the DOW march higher and if it did how much higher, since the correction earlier in the year it has struggled to get over 25K let alone close to the all time high again

I agree that we shouldnt go straight to reflation.The reflation comes after debt is purged and many companies go down.I think Armstrong is going along the lines that the public sector is broke and so people will park money in the private sector.He could be right,but in a panic i prefer history as my guide and its treasuries that always do well.Most bears in history have favoured gold in the first part of the bear,and treasuries through the rest.I think the top of the earnings cycle probably is in,or if not we are very close.

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25 minutes ago, durhamborn said:

I agree that we shouldnt go straight to reflation.The reflation comes after debt is purged and many companies go down.I think Armstrong is going along the lines that the public sector is broke and so people will park money in the private sector.He could be right,but in a panic i prefer history as my guide and its treasuries that always do well.Most bears in history have favoured gold in the first part of the bear,and treasuries through the rest.I think the top of the earnings cycle probably is in,or if not we are very close.

Thanks DB

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38 minutes ago, TJHooker said:

Can anyone recommend a platform to open a SIPP/ISA that trades the ASX was looking to get some NCZ New Century Resources.

Im with AJ Bell and its a minimum of £10,000.

You can buy on Interactive Investor, doesn't look like there is a minimum, but don't quote me on that

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Things are going for bad to worse for Italy, eurosceptic economic minister rejected by the president and bond yields are blowing out in responce.  The 10 Year is nearly up to US level for goodness sake!

Debt to GDP for the club med ranking is Greece, Italy, Portugal, Cyprus and then Spain.  Those are the ones to watch next to see if the contagion is spreading, which will turn this from an Italian problem to an ECB problem.

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24 minutes ago, leonardratso said:

glasgow kiss

I was at a dinner once with people having a mix of native languages. I had a few to drink and meant to announce only to my English-speaking neighbour that I needed a gypsy's, only I must have shouted it a bit. Somehow everyone wanted to know what I was saying and it snowballed to where I had to offer the translation "necessito un beso de una gitana" (I need the kiss of a gypsy) which didn't help the situation or my credibility at all . Never try to explain cockney rhyming slang.

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17 minutes ago, Funn3r said:

I was at a dinner once with people having a mix of native languages. I had a few to drink and meant to announce only to my English-speaking neighbour that I needed a gypsy's, only I must have shouted it a bit. Somehow everyone wanted to know what I was saying and it snowballed to where I had to offer the translation "necessito un beso de una gitana" (I need the kiss of a gypsy) which didn't help the situation or my credibility at all . Never try to explain cockney rhyming slang.

:lol::lol::lol::lol: 

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Go on then -Chronyx/ what’s the plan for this week...it’s  hold tight to the IBTL for me and see if I can move a chunk from one of my picks which isn’t doing well to one that is... might make a bit...

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  • 429 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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