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fru-gal

Britain Hasn’t Been This Risky in 40 Years

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Good link Fru-gal.

Yup, and the next Thatcher figure to 'save us' could be even more of a neoliberal fascist.

Great!

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56 minutes ago, fru-gal said:

This is exactly where we are going,back to the late 70s,but not just us,everyone.Thats what a reflation cycle is.Thats what we are going to get.Glad the media is starting to get a feeling about it.The deflation cycle that started around 82 is ending.It will go out with a bang.People need to understand that in a deflation cycle you get higher highs in assets because you get lower lows in interest rates.Spikes here and there,and even large falls,but every time they recover upwards to higher highs due to rates falling.The end of a deflation cycle is where we are now.Where rates cant go lower and it is the fall in earnings that push people/companies under.Nothing will or can stop it now.Nothing.The answer will be real printing.Money direct to government and a full on reflation cycle that sees inflation and rates crank up over perhaps 8 years.(i expect inflation and rates to be close to double figures in 2025 at least).

The politics isnt the driver of this as the article thinks,the economics drive the politics.Among everyone i know who i would call normal everyday people,none of them understand what an inflation cycle is and what happens during one.They cant remember the last one,and if they can they just think it was a terrible time,but dont know it as a reflation cycle.

There is a sweet spot to buy real assets as the cycles change.Massive wealth destruction hits first,and those who wait will be rewarded.Those leveraged high now will be in serious trouble.Leveraged BTL will just be something in a history book by 2025 IMO.Rents will not keep up with debt servicing costs.No chance.

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45 minutes ago, ThePrufeshanul said:

What sort of timescales do you think the deflationary crunch and re-flation will occur over?

8 years probably.Two years from now onwards to get through the deflation,maybe quicker depending on when it hits and how quick the response.Inflation and rate increases will start to go up slowly after that and increase faster through the cycle.2025 is where i see rates and inflation at the highest.Of course times are just a guess.It could take longer or it could take less,but i am sure we are getting it,no doubts about that,just the scale is in question.Stocks will bottom first i expect,but only some will keep up with inflation after that.Houses are going down hard.I expect them to flat line after that nominal or go up much less than inflation through the cycle as yields go up to make up for increasing rates.Lets see how it plays out.If it does hit the picture from then on will be very clear.

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Thanks db. 

I know you have previously said that Gold may rally over the next couple of months and the Dollar index is certainly falling. Obviously the bullion price hasn't hugely changed so far - do you still see this happening (before prices collapse)?

If you had a lump sum of cash currently, with no debt, where would you be directing it currently?

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Look Durhamborn, is there not a bit of Mathus in there. The western economies do not have the demographic to support the rebalance. I doubt it will go full swing to the 80s level.

Am I missing something when I think demand won't be strong?

 

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1 hour ago, ThePrufeshanul said:

Thanks db. 

I know you have previously said that Gold may rally over the next couple of months and the Dollar index is certainly falling. Obviously the bullion price hasn't hugely changed so far - do you still see this happening (before prices collapse)?

If you had a lump sum of cash currently, with no debt, where would you be directing it currently?

Going back to late last year i saw the dollar index going down from around 103 to 86/88.Almost everyone at the time said it was going higher.Its 93.99 right now.I still expect 86/88 to be the bottom.Gold i expected to rally up to $1450+ due the falling dollar and that hasnt happened yet.However i think thats because stocks havent fallen yet.I still think gold will go up to $1450 before it rolls over as well.

Right now for myself iv been buying US treasuries TLT,though not hard as i think the pound my rally another 10%.Iv also been buying a few gold stocks,though i will be selling those later in the year if or if not gold does rally hard as i expect everything to go down if the deflation hits (apart from the dollar and treasuries that will go up).

Id probably stick with the cash to be honest.If this comes to pass then it will be a once in a generation chance to pick up assets on the cheap.As i say this is just all my thoughts and im not qualified or anything.

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12 minutes ago, durhamborn said:

Going back to late last year i saw the dollar index going down from around 103 to 86/88.Almost everyone at the time said it was going higher.Its 93.99 right now.I still expect 86/88 to be the bottom.Gold i expected to rally up to $1450+ due the falling dollar and that hasnt happened yet.However i think thats because stocks havent fallen yet.I still think gold will go up to $1450 before it rolls over as well.

Right now for myself iv been buying US treasuries TLT,though not hard as i think the pound my rally another 10%.Iv also been buying a few gold stocks,though i will be selling those later in the year if or if not gold does rally hard as i expect everything to go down if the deflation hits (apart from the dollar and treasuries that will go up).

Id probably stick with the cash to be honest.If this comes to pass then it will be a once in a generation chance to pick up assets on the cheap.As i say this is just all my thoughts and im not qualified or anything.

Thanks db

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11 minutes ago, Freki said:

Look Durhamborn, is there not a bit of Mathus in there. The western economies do not have the demographic to support the rebalance. I doubt it will go full swing to the 80s level.

Am I missing something when I think demand won't be strong?

 

Demand will be huge.Government demand.The consumer will be dead for a while.Demographics wont matter.This is a reflation cycle coming.Industrial based.Not consumer based.It wont be a rebalance,it will be a reflation.Every project sat on government desks will get the green light.Anything ready to go.Wind farm,clean energy,roads,rail,anything.The CBs will go past the banks this time because velocity is dead.This will be direct government spending into the economy.Not benefits,not pensions,not wages.Direct building things.

This was a super cycle,no doubt about that,but its ending.The only way out of the financial dislocation ahead will be a reflation.People who think the state doesnt have the power are wrong.Nothing to worry about for those who see it for what it is.After the huge sell off buy the gold miners,buy some physical gold coins,(no capital gains tax) buy the copper/iron ore miners,buy the industrials.If this goes as every other cycle has we should start to see the US equity markets roll over soon.If i had to guess i would say the defaults might start in oil service companies or car loans,but thats just a guess.

 

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9 minutes ago, GrizzlyDave said:

Japan has had low rates for 20 years.

rates aren't going up.

will be 1% or less for next ten years. BIND

7%-10% in 2025.Japan was simply part of the deflation cycle we have had.The printing ahead will be going direct into the economy.The Fed will make peoples eyes water the amount they will print.£8 trillion i expect.I know its an outlandish call and im prepared to be wrong,but im investing to be right.

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24 minutes ago, GrizzlyDave said:

Japan has had low rates for 20 years.

rates aren't going up.

will be 1% or less for next ten years. BIND

There is a Logic to that.

My eyes are on China

When we industrialised the workers fought to improve conditions we only have public parks and the facilities we enjoy today due to their struggles.

With this growth even with automation people where needed.

In China they cornered much of the worlds manufacturing but because of computers/internet, logistics and robotics I just dont see their middle class doing the same as us they just dont have the leverage.

All their capital has been captured by Billionaires and they have pissed the money away at an alarming rate.

Our current house price slowdown is mostly down to their capital controls on a thread in the Cambridge sub form a poster discusses how they have visited normal fixer uppers in Cambridge and its been them and 9 Chinese buyers.  We used to enlist when the germans wanted our homes. If they had only put a suit on and printed some money we would have made them a cup of tea, moved into rented and thrown in a few kids to sweeten the deal.

This will be the source of the deflation vortex and the printing will be in an effort to recover from the loss of this money. 

Edited by Fromage Frais

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1 hour ago, durhamborn said:

Going back to late last year i saw the dollar index going down from around 103 to 86/88.Almost everyone at the time said it was going higher.Its 93.99 right now.I still expect 86/88 to be the bottom.Gold i expected to rally up to $1450+ due the falling dollar and that hasnt happened yet.However i think thats because stocks havent fallen yet.I still think gold will go up to $1450 before it rolls over as well.

Right now for myself iv been buying US treasuries TLT,though not hard as i think the pound my rally another 10%.Iv also been buying a few gold stocks,though i will be selling those later in the year if or if not gold does rally hard as i expect everything to go down if the deflation hits (apart from the dollar and treasuries that will go up).

Id probably stick with the cash to be honest.If this comes to pass then it will be a once in a generation chance to pick up assets on the cheap.As i say this is just all my thoughts and im not qualified or anything.

93.77 now and tanking

 

IMG_4262.PNG

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2 hours ago, durhamborn said:

7%-10% in 2025.Japan was simply part of the deflation cycle we have had.The printing ahead will be going direct into the economy.The Fed will make peoples eyes water the amount they will print.£8 trillion i expect.I know its an outlandish call and im prepared to be wrong,but im investing to be right.

Not going to happen. :-) I would love rates to go up like that, but it is fantasy.

government-debt-to-gdp

government-debt-to-gdp

Edited by GrizzlyDave

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Just now, GrizzlyDave said:

Not going to happen. :-) I would love rates to go up like that, but it is fantasy.

The CBs will over do things in panic setting of a reflation cycle.Once it starts inflation will rise slowly and the CBs will be behind the curve.Unlike a blip in a deflation cycle though it will keep rising.By the time the CBs move rates up to try to cool the inflation it will be too late.Inflation will be in double figures at the back end of the cycle,rates wont be far behind.

The deflation cycle is nearly over.Its just waiting to go out with a bang.Every single deflation cycle in history has ended up bringing in an inflationary reflation cycle.Every one.

I know its hard to think rates near or at double figures,but they are coming by around 8 years time if it plays out like past cycles.Houses will be dead long before that though,the lack of credit and lack of lending will kill them first in the sell off.

Lets see how things play out the next 18 months.)

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5 minutes ago, durhamborn said:

The CBs will over do things in panic setting of a reflation cycle.Once it starts inflation will rise slowly and the CBs will be behind the curve.Unlike a blip in a deflation cycle though it will keep rising.By the time the CBs move rates up to try to cool the inflation it will be too late.Inflation will be in double figures at the back end of the cycle,rates wont be far behind.

The deflation cycle is nearly over.Its just waiting to go out with a bang.Every single deflation cycle in history has ended up bringing in an inflationary reflation cycle.Every one.

I know its hard to think rates near or at double figures,but they are coming by around 8 years time if it plays out like past cycles.Houses will be dead long before that though,the lack of credit and lack of lending will kill them first in the sell off.

Lets see how things play out the next 18 months.)

In 18months rates will still be 0.25%.

Where is the inflation coming from? There is a global deflationary spiral!

Extending the debts in financial crisis 2, will just push us further down into deflation.

We probably have another 20 years of this.

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12 minutes ago, GrizzlyDave said:

In 18months rates will still be 0.25%.

Where is the inflation coming from? There is a global deflationary spiral!

Extending the debts in financial crisis 2, will just push us further down into deflation.

We probably have another 20 years of this.

In 18 months interest rates will be zero with massive money printing probably.The inflation will come from where the printed money is spent.It will go direct to government to spend on zero rate coupons.The rates will be high towards the end of the reflation cycle,out in around 2023/2025.The fact we are going to have a massive deflationary crash is the reason the CBs will go too far.This deflation cycle is ending.It will end with a bang though.I think its very very close now.The only political answer when it hits is to inflate,and that is what they will do.It wont create more deflation because it will be industrial buying and production,not consumption.

Like i say i know thats way out compared to most peoples thinking,but thats how i see it.We can enjoy seeing how things play out.

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13 minutes ago, durhamborn said:

 

Like i say i know thats way out compared to most peoples thinking,but thats how i see it.We can enjoy seeing how things play out.

If it plays out like you say, I don't think it will be very enjoyable for many many people.

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3 hours ago, Fromage Frais said:

Our current house price slowdown is mostly down to their capital controls on a thread in the Cambridge sub form a poster discusses how they have visited normal fixer uppers in Cambridge and its been them and 9 Chinese buyers.  We used to enlist when the germans wanted our homes. If they had only put a suit on and printed some money we would have made them a cup of tea, moved into rented and thrown in a few kids to sweeten the deal.

You presume the Chinese will be able to hold onto them for the mortgage term.  If there are controls it may not be enough to keep hold of it.  Many Chinese will be looking to offload when they can not keep up repayments.

The real issue is the Chinese fund managers that have purchase many such properties in bulk as a fund/trust and can probably find another interested parties to dilute their fund.  However this presumes these "new builts" are built well and worth every penny.

 

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11 hours ago, GrizzlyDave said:

In 18months rates will still be 0.25%.

Where is the inflation coming from? There is a global deflationary spiral!

Extending the debts in financial crisis 2, will just push us further down into deflation.

We probably have another 20 years of this.

5 year fixed rate mortgages at 1.59 tell me rates are going nowhere unfortunately :-(

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14 hours ago, durhamborn said:

In 18 months interest rates will be zero with massive money printing probably.The inflation will come from where the printed money is spent.It will go direct to government to spend on zero rate coupons.The rates will be high towards the end of the reflation cycle,out in around 2023/2025.The fact we are going to have a massive deflationary crash is the reason the CBs will go too far.This deflation cycle is ending.It will end with a bang though.I think its very very close now.The only political answer when it hits is to inflate,and that is what they will do.It wont create more deflation because it will be industrial buying and production,not consumption.

Like i say i know thats way out compared to most peoples thinking,but thats how i see it.We can enjoy seeing how things play out.

Deleted.

 

 

Edited by Lord D'arcy Pew
1984

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