Deflationary collapse and the Reflation Cycle to Come.

[ThoughtCriminal]

17 minutes ago, Errol said:

Coininvestdirect seem to do some clever trick to get around VAT on silver orders. Not sure how.

Silver Britannias at 17.90 too. Wonder how they get around VAT......

[TheCountOfNowhere]

7 minutes ago, ThoughtCriminal said:

Silver Britannias at 17.90 too. Wonder how they get around VAT......

By not sending you the coins ?  

[Majorpain]

25 minutes ago, Errol said:

Coininvestdirect seem to do some clever trick to get around VAT on silver orders. Not sure how.

They dont not pay VAT, evasion is illegal, its really quite simple (and legal).

UK - 20% VAT on entire order

Germany - VAT only on the dealers margin

As long as the VAT is paid in the EU, its legal and you dont have to give HMRC anything. 

 

I use https://www.silver-to-go.com/ and have had no bother, DYOR with things like this though.

[ThoughtCriminal]

6 minutes ago, Majorpain said:

They dont not pay VAT, evasion is illegal, its really quite simple (and legal).

UK - 20% VAT on entire order

Germany - VAT only on the dealers margin

As long as the VAT is paid in the EU, its legal and you dont have to give HMRC anything. 

 

I use https://www.silver-to-go.com/ and have had no bother, DYOR with things like this though.

And their Britannias are 85p cheaper too. 

 

Thanks for that Major

[Barnsey]

Also of interest, seems house flipping has peaked in U.S.

https://www.cnbc.com/2017/09/14/high-home-prices-cause-house-flippers-to-pull-back.html

Quote

After two straight years of gains, the rate of home flipping, defined as buying and selling a home in the same calendar year, flattened in the second quarter of this year, according to a new report from Attom Data Solutions. Nationwide, 53,638 single-family homes and condos were flipped in the second quarter, which is 5.6 percent of all home sales during the period. That rate was down from 6.9 percent in the previous quarter and unchanged from a year ago.

Quote

Flippers, who used to work largely in cash, are now leveraging their investments more, turning even to low down payment FHA mortgages. In the priciest markets, like Denver and Boston, more than half of flips were financed with mortgages. In Seattle, where prices are skyrocketing, flipping is drying up at a faster pace.

 

Edited September 14, 2017 by Barnsey

[Calcutta]

Alright, I've given it my best shot but I'm buggered of i cam find an upto date list of FTSE companies and their debt without going into all 350 individually.

Any ideas? Sorry to be div.

[MrXxx]

So having followed this thread and read the article on the demise of fiat, the only safe option to preserve wealth (as its now about preserving rather than maintaining buying power) it to go pm...so why not 100% pm?

[leonardratso]

20 minutes ago, MrXxx said:

So having followed this thread and read the article on the demise of fiat, the only safe option to preserve wealth (as its now about preserving rather than maintaining buying power) it to go pm...so why not 100% pm?

how you gonna buy chips with a 10kg gold bar?

[Eventually Right]

I've been reading Ray Dalio's (head of the biggest hedge fund in the world) views on deleveragings. 

I'll post a link to a video that explains it much better, but basically his view is that credit drives most of economic expansion, and there are both short term and long term debt cycles.

The short term ones are what most people would think of as the normal boom and bust business cycle. The government alleviates these by reducing interest rates, which increases demand for goods/services, and causes asset prices to rise.

However, because eventually over decades, the cost of servicing debt eventually gets too high-because interest rates can't go any lower-the long term debt cycle has to come to an end.

Because these deleveragings are usually once in a lifetime events (e.g. The US in the 30s) investors don't tend to pay much attention to them, because they aren't in their living memory. But when they happen, they can cause massive economic/political/social upheaval.

It seems to me that if you subscribe to his thinking, then the UK must be coming to the end of a long term debt cycle, and the next ecomic downturn is going to be uglier than anything we have seen in decades.

I was wondering how close you think your analysis is to his, durhamborn?

Link to the video (and/or document) is here, well worth a view imho: http://www.economicprinciples.org/

[durhamborn]

40 minutes ago, Eventually Right said:

I've been reading Ray Dalio's (head of the biggest hedge fund in the world) views on deleveragings. 

I'll post a link to a video that explains it much better, but basically his view is that credit drives most of economic expansion, and there are both short term and long term debt cycles.

The short term ones are what most people would think of as the normal boom and bust business cycle. The government alleviates these by reducing interest rates, which increases demand for goods/services, and causes asset prices to rise.

However, because eventually over decades, the cost of servicing debt eventually gets too high-because interest rates can't go any lower-the long term debt cycle has to come to an end.

Because these deleveragings are usually once in a lifetime events (e.g. The US in the 30s) investors don't tend to pay much attention to them, because they aren't in their living memory. But when they happen, they can cause massive economic/political/social upheaval.

It seems to me that if you subscribe to his thinking, then the UK must be coming to the end of a long term debt cycle, and the next ecomic downturn is going to be uglier than anything we have seen in decades.

I was wondering how close you think your analysis is to his, durhamborn?

Link to the video (and/or document) is here, well worth a view imho: http://www.economicprinciples.org/

I agree with most of it.I look at things in inflation/disinflation.Disinflation sees interest rates slowly fall with counter trend increases along the way,but ending near (or now at) zero.This turns everyone into investment experts because shares ,bonds and most property goes to higher highs each time.This hoodwinks people though who dont look where we are on the risk curve.House's that went up as rates fell from 16% to 0.25% and are at the highest at the end point seem normal to people.

I think we are about to see this disinflation cycle end.That is pretty much certain.I think it ends with a very large debt liquidation cycle (and with it massive wealth destruction).Others see straight to inflation.

Very likely its the biggest since WW2 and big enough so people dont ever forget it,and nor do their children or grandchildren.

Its the next cycle that interests me most though.Investing in a full on reflation cycle is much much harder than a disinflation.Very few people will even spot its a reflation until its too late.Others will try to repeat the buys that have worked for 35 years.In simple terms i think the consumer is dead.Industry and governments investing will drive the growth,and the inflation.Rates could be double figures by 2025.The key point about the next reflation cycle is that i think it will lead to a long distribution cycle in assets.PE ratios will keep going down to force yields up for most assets.That fact will not be understood by most people because it hasnt happened for a long time.Since the last reflation.

[Houdini]

Isn't that what Durhamborn is predicting - a deflationary bust which will eventually be fixed by inflating the problem away by government infrastructure spending much in the same way that the Public Works Administration did in the US in 1933...

[Houdini]

4 minutes ago, durhamborn said:

.Rates could be double figures by 2025.The key point about the next reflation cycle is that i think it will lead to a long distribution cycle in assets.PE ratios will keep going down to force yields up for most assets.That fact will not be understood by most people because it hasnt happened for a long time.Since the last reflation.

That implies there are very few safe places to keep your savings at the moment - no point heading towards most if not all of the stock market for years and commodities are going to be a long term bet as well

[stormymonday_2011]

49 minutes ago, Houdini said:

Isn't that what Durhamborn is predicting - a deflationary bust which will eventually be fixed by inflating the problem away by government infrastructure spending much in the same way that the Public Works Administration did in the US in 1933...

I seem to remember that much of the government infrasructure spending from the mid 1930s was on things that went bang

War is usually good for inflation.

The bigger the better. 

Your call up papers are in the post

Edited September 14, 2017 by stormymonday_2011

[Houdini]

7 minutes ago, stormymonday_2011 said:

I seem to remember that much of the government infratsructure spending from the mid 1930s was on things that went bang

War is usually good for inflation.

The bigger the better. 

Your call up papers are in the post

From memory US Military build up started in 1940.... 

[durhamborn]

Just now, Houdini said:

That implies there are very few safe places to keep your savings at the moment - no point heading towards most if not all of the stock market for years and commodities are going to be a long term bet as well

My calls Houdini are the same as at the start of this thread Dollar index down to 88/86 from 102,gold up to $1450 GDX to maybe $35.Once the roll over begins the dollar will shoot back up (maybe dollar index to 125+) and treasuries will have once last boost (TLT to $150+).Oil might fall to $15,gold sub $900,silver sub $12,US markets off 50%+.Fed prints $8 trillion and the reflation is locked in,starting slow,but building through the cycle.Rates will undo all the falls from 82 in 8 years and be double figures in 2025 (as will inflation)

Each call might not reach the levels,but as long as the direction of travel is right il be happy and so far so good.

5 minutes ago, stormymonday_2011 said:

I seem to remember that much of the government infratsructure spending from the mid 1930s was on things that went bang

War is usually good for inflation.

The bigger the better. 

Your call up papers are in the post

Very true.I think military spending will be a big part of the reflation.I dont think they will use most of it though.Until the end of the reflation cycle when currencies blow up.,then.........

[stormymonday_2011]

33 minutes ago, Houdini said:

From memory US Military build up started in 1940.... 

And that is when the Great Depression truly ended not when Roosevelt started the New Deal. 

[Will!]

47 minutes ago, stormymonday_2011 said:

I seem to remember that much of the government infrasructure spending from the mid 1930s was on things that went bang

War is usually good for inflation.

It's for that reason I have GKN, Smiths Group and Ultra Electronics on my watchlist.

[stuckmojo]

9 hours ago, Houdini said:

That implies there are very few safe places to keep your savings at the moment - no point heading towards most if not all of the stock market for years and commodities are going to be a long term bet as well

Good point. However, timing is everything in this. 

If the consensus on the thread is that there will be a big ass crisis coming, this will affect stock prices as well as geared asset prices (houses). Yes, I get the metals approach, but wouldn't one do well to keep cash and use it at the right time? 

 

[LC1]

16 hours ago, Majorpain said:

They dont not pay VAT, evasion is illegal, its really quite simple (and legal).

UK - 20% VAT on entire order

Germany - VAT only on the dealers margin

As long as the VAT is paid in the EU, its legal and you dont have to give HMRC anything. 

 

I use https://www.silver-to-go.com/ and have had no bother, DYOR with things like this though.

Not wishing to derail the thread (but since it's being discussed!), as I understood it some years back, you can either pay full UK VAT and have them delivered to you, or you can pay EU VAT and then pick them up from EU or arrange to have them couriered at your own risk. Or has anything changed?

[Majorpain]

28 minutes ago, LC1 said:

Not wishing to derail the thread (but since it's being discussed!), as I understood it some years back, you can either pay full UK VAT and have them delivered to you, or you can pay EU VAT and then pick them up from EU or arrange to have them couriered at your own risk. Or has anything changed?

If that was true, every time you bought something from the EU you would have to pay VAT on it to import it into the UK.  As long as VAT is paid in a country in the EU single market, then moving it from one country to another means it retains its VAT paid status is my understanding.  HMRC haven't turned up at my door yet....

I think it was a dealer in Latvia (?) who was doing what you described, I didn't like the look of it and found the other company instead.

[NuBrit]

I see Hugh Hendry has closed his hedge fund, he seems to think that we're not far off an inflationary environment.

http://www.zerohedge.com/news/2017-09-14/markets-are-wrong-hugh-hendry-shuts-down-his-hedge-fund-here-his-parting-letter

 

Imagine property getting even more expensive, that would be a kick in the teeth to many on here.

[cognitive dissonance]

3 minutes ago, NuBrit said:

Imagine property getting even more expensive, that would be a kick in the teeth to many on here.

Have you seen the £ since the BOE spoke yesterday? The markets think an interest rate rise is coming......either that or the short sellers are sitting on the toilet and closing their bets, bit like the Bitcoin holders 

Looks more like a kick in the teeth to all the mugs holding excessive debt to me......but all always TWT 

[cognitive dissonance]

*as always* - stupid f00king website won't let me edit.....

[ThePrufeshanul]

14 hours ago, MrXxx said:

So having followed this thread and read the article on the demise of fiat, the only safe option to preserve wealth (as its now about preserving rather than maintaining buying power) it to go pm...so why not 100% pm?

Because pm prices could potentially crash and then stay low. 

If the problem with the economy is debt then people cash in assets to pay that debt off, for example, say interest rates rise and you can't afford your mortgage - are you going to be homeless with large holdings in Gold? As everyone sells, Gold price decreases.

Will it then rise again? Maybe - or maybe everyone piles their money into crypto instead.

Plus, even if pm rises again you don't know the timescales involved - how long can you afford to tie up your money?

Since nobody can tell the future diversification is a much safer bet to preserve your wealth than sinking it all into one asset class - even pm.

[Lavalas]

9 minutes ago, cognitive dissonance said:

*as always* - stupid f00king website won't let me edit.....

26 more posts and the power is yours!!!