MB Fund Podcast: The Road to Economic Hell is Paved with Good Intentions

Today we look at a rough roadmap of what would need to happen on the road to suspending capitalism and markets being artificially held up indefinitely. Whilst we’ve already passed a few markers, there are numerous steps in fiscal and monetary policy to get us to the point of economic hell. Tune in today as we discuss

In today’s investment webinar MB Fund’s Head of Investments Damien Klassen, Chief Strategist David Llewellyn Smith and Head of Operations Tim Fuller give an overview of why The Road to Economic Hell is Paved with Good Intentions.

Next week we’re interviewing Jeff Booth, author of #1 Best Seller ‘The Price of Tomorrow” to discuss advances in Technology and the Deflation it can produce. If you have any questions for him, you can leave them here

View the webinar slides here

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Tim Fuller is Head of Operations at the MacroBusiness Fund, which is powered by Nucleus Wealth.

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Tim Fuller is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.

Tim Fuller

Comments

    • DominicMEMBER

      A purge should be coming given record high PE ratios and the fact that we’re descending into a Depression, however ….

      • Sigh …. capital does not care as long as ratios are in their favor.

        BTW when I say PE I mean private equity investment businesses and not stock market prices … irrelevant.

        • DominicMEMBER

          Yes, I knew what you meant by PE — I worked in Leveraged Finance in a past life, so my life was full of PE. Not Physical Education, to be clear 😉

          • As I have long affiliations with it in my duties and my associations, so I guess you understand the caustic anti classical ramifications associated with it as a AET believer.

          • Eh … Capitalism is not a monolith and tokens of exchange don’t change its core functions unless your arguing that state capitalistic countries using commodity theory of money collapsed in the face of market based countries using fiat based theory. Yes they were lied too … but yeah politics … rim shot.

          • DominicMEMBER

            Skip, all fiat currencies collapse – fact.

            Commodity-based currencies, more slowly (because restraints). They all get abused eventually and when they’re too irksome you do what Nixon did and ‘temporarily suspend’ the gold window (still temporarily suspended since 1971!). The beauty of a gold standard is that it calls out the bullsh#tters of the world – that’s when real people step up to the plate. The Nathan IQs are never allowed to exist.

          • Money is the state, the great depression was not calling out BS, but a post facto examination of everything that lead up too it, regardless of the so called properties of a gold standard E.g. the belief it was a talisman against a ill wind was actually a excuse for the deeds that lead up too and enabled the men to act in a manner that set up the events, leading to massive control fraud which destabilized the entire world economy – and that was before computers.

          • Skip, here’s a prediction for ya. You’ll sincerely regret not owning some precious metals in the years to come.

            I can’t say simpler than that. Bet against me, please do. Do I give a fk either way? No.

      • Stewie GriffinMEMBER

        New cultural values. They will ‘save the system’ with MMT – 100%. But without debt repudiation the flows will continue in the economy and our enslaving debts will continue to be serviced. One day people will understand that culture really does matter, and it impacts us every decision we make from the ground up.

        • DominicMEMBER

          I agree fundamentally that MMT is inevitable i.e. to maintain the status quo. The alternative, after all, is to let it fail voluntarily (and that just isn’t in the human psyche IMO), even if failure of the existing system is for the long-term good (future generations etc). The people in charge don’t care about future generations, however much they insist otherwise, as their interests — their personal wealth — are served by propping it up perpetually. Or, at least, attempting to.

          While you haven’t said otherwise, I sense that if there is a difference of opinion between us, it rests on whether the system can be sustained longer term. I firmly believe the system will fail, despite the best efforts of the authorities — like it did in Weimar, like it in Zimbabwe, Argentina, Venezuela, the Roman Empire etc etc. Every bit of intervention that pushes against market forces creates significant damage to the underlying economy — which is papered over perpetually with printed money, until the damage is so severe it becomes exposed and the system implodes. I reckon 5-7yrs from now the existing system is cactus and depending how Covid plays out, it could happen a lot sooner.

          • MMT is the description of the operative monetary system post WWII, switched back to a quasi gold standard post hostilities in an ad hoc system for polisc reasons [convoluted]. Then the U.S. bought the Vietnam war off the French in the name of stopping commies [MIC adventure] and France exchanged USD to gold and horded it, that came to fruition when the U.S no longer had the gold reserves to back its currency in the war against “COMMUNISM” aka stealers of property E.g. rich people – see Rand] so I’m not a crook went off it or sufffer the consequences being the leader of the free market agenda = splat.

          • Stewie GriffinMEMBER

            The system will be saved – people will continue to slave away. The purpose of those at the top isn’t to lead us to the stars, it is merely for them to remain at the top. Pile of gold or pile of sh!t, they care not, so long as they are at the top. That is the sum vision or our new cultural overlords.

            There will be no crash, only a slow grind into eternal poverty, all the while the general population and media will be cheering on the very policies that make our continued enslavement possible. The ‘system’ must be saved.

          • Stew MMT does not dictate flows or distribution of funds I.e. its not a political agenda with an ideological bias E.g. it serves those that administrate it.

            Maybe your complaints would be better directed at the administration and not the little clay tablets used to signify the trade contracts contents but more so the rights of the contracts of trade at onset and how that determines value here and now and into the unknown future …

          • Dominic btw the demise of the Roman empire was not a monetary event, bit more complex, but Ag and an a social dynamic of the elites infighting for status and control on hereditary competition is more acute.

            Sorta like the Von thingy ….

          • Stewie GriffinMEMBER

            I think Kodiak said it best:

            “Sorry – I have zero interest in any discussion with you.”

          • So a personal dislike is somehow elevated to rational thought because it conflicts with some peoples perspectives of reality and how the world is … just wow … how about everyone else just disagrees and your thoughts are banned … oops that’s what your camp did … chutzpah …

          • DominicMEMBER

            Skip, MMT is a re-heated scheme that has failed a thousand times throughout history — but as it’s been re-branded it’s sucked in a few gullible crvnts. “This time it’ll work!” Wheeee ……

            MMT, distilled to its essence is about ‘getting something for nothing’. It’s best illustrated like this:
            – A man works a few hours, earns $100 and takes it to the bank to deposit. His $100 represents a couple of hours of productive endeavour which he choses to save.
            – His neighbour prints $100 on his printer and deposits it at the bank. His $100 represents zero productive endeavour, but this fake money is circulating as real money. In other words, the neighbour has stolen a portion of the productivity of the the first guy who actually did something real to earn the money. D’ya get it?

            Nah, thought not. Never mind.

          • DominicMEMBER

            Skip, the Romans continually debased the currency — and (funnily enough) there is an uncanny correlation between the debasement of the currency and society’s morals. Maybe (just maybe) it has to do with a sub-conscious acknowledgement that the ‘end is near’ and people had better grab what they can for themselves while they can. (Just a suggestion)

          • Stewie GriffinMEMBER

            Rome existed as a Republic for 500 years prior to the arrival of a certain exoduses group from Babylon, who just coincidentally began arriving enmass as a presence in Rome at the same time Julius Caesar came to power in 31 BC and founded the Empire.

            The later Roman period was characterized by enslaving debts, corruption, immorality and a collapsing currency.

            Within 100 years of the founding of the Empire by Caesar the Roman Denarius, which had been stable in silver content for the 500yrs previous began to decline:

            https://en.wikipedia.org/wiki/Denarius#/media/File:Fineness_of_early_Roman_Imperial_silver_coins.png

            Culture matters on things such as belief in sound money, or using “money” as a form of magic to get something from nothing.

        • “enslaving debts” = tiresome esoteric morality plays are not an economic argument, granted a Jungian equivalent.

        • DominicMEMBER

          The ‘system’ must be saved.

          We don’t disagree on that, but I’m a ‘markets’ guy and the market wins every time — a committee of people have no more power over markets than they do over Mother Nature. As I said, the ‘cost’ for every (gubmint / central bank) intervention to forestall the market’s desires is further erosion of the currency — the currency (all currencies) will, as a result, collapse eventually. That’s where it ends. There is no other outcome than that. It is baked in the cake right now.

          I don’t mind a jot whether anyone disagrees — I’m set and sleeping soundly at night. Cruises down the Rhine may not be the thing when I retire but I’ll be very comfortable either way.

          • Stewie GriffinMEMBER

            I don’t believe true markets exist any more – the purpose of the financial markets has been inverted, instead of being there to serve the economy, the economy is now there to serve the financial markets.

            Every financial set back since 1987 has been met with CB liquidity and lower interest rates, spraying more enslaving debt through the economy. By spraying it everywhere it has inverted the interests of the general public ie sound money and aligned their interests with those most able to take advantage of both access to debt and cheaper debt.

            Just like the Roman Denarius I expect the full weight of the economic burden, represented by the economic subsidy to the financial system, to fall upon our currencies – our stock markets will look just like Venezuela’s. The primary purpose of the markets now is to preserve wealth not generate new capital.

            Over the long term though I am very black pilled and agree with you, there will be a correction, but imho in real terms it will be long and grinding and it may well end up following the exact same trajectory as Rome’s stock market, as the destabilising effects of resource depletion start making themselves more visible.

          • DominicMEMBER

            I don’t think I can suffer a long and grinding decline (agreed, it’s a possibility). I’m banking on the decline gathering pace and then going exponential. To quote Hemmingway: slowly at first, then suddenly ..

  1. Stewie GriffinMEMBER

    An interesting discussion, especially about the implications of a Biden presidential win. But to me, the really interesting possibility is that Trump wins and I wonder what the play will be for that senario? Frankly the way the media and the popular narrative have it, Biden is apparently a shoe in…..

    As I’ve mentioned before my starting point with EVERY popular narrative in the media is that it is objectively false, until proven otherwise.

    What narrative is the media currently pushing in regards to the election?

    IMHO with Covid and the riots there is intense sense of assurance that Biden will wipe the floor with Trump, which is being set up by a media. What if once again the media and those who derive their moral values of what constitutes ‘good’ and ‘bad’ from the media, are operating in a deliberately manufactured bubble?

    The Primary model predicted Trump would win over Biden with a 91% certainty in March – sure a large amount of water has flowed under the bridge since then, with the media beat up on the ‘Peaceful Protests’ occuring in the US. BUT 91% is a big lead to lose – no doubt Trump has managed a good job, aided and abetted by a hostile media – with who this elections is really between.

    But then there is also this:

    “If Trump is behind in the polls, why do most voters say, in the same surveys, that he will win the upcoming election?” As Harry Enten recently noted at CNN, “An average of recent polls finds that a majority of voters (about 55%) believe that Trump will defeat Biden in the election. Trump’s edge on this question has remained fairly consistent over time.” This is far more than mere statistical curiosity by number nerds. Several peer-reviewed studies have shown that surveys of voter expectations are far more predictive of election outcomes than polls of voter intentions.

    https://spectator.org/why-the-polls-predict-trump-will-win/

    Then there is the difference in polling between “Joe Citizens” and “Professional Commentators”

    Citizen expectations of who will win have it near Neck and Neck
    https://pollyvote.com/en/components/expectations/citizen-forecasts/

    Versus those most susceptible to the media bubble i.e. the “experts”
    https://pollyvote.com/en/components/expectations/expert-judgment/

    The trouble is that imho, not only is the media failing in its job of producing an accurate summation of facts, their biases are producing a false bubble that they may or may not believe themselves (certainly the rank and file do, but I’m not so sure that those who own the media necessarily believe Trump will lose) which will trigger profound and violent market volatility (and trading profitability), the real harm in what the media is doing to societal expectations.

    The media is setting up an expectation of Trump’s defeat among all the most TDS afflicted progressives. I fully believe that it won’t be Trump who will refuse to acknowledge the results of the election, but the Democrats, the inner city progressive liberals and their antifa black shirts – who all on the false expectations of the media will be certain that the election has been stolen.

    Which will set up the next 4 years as ones of protest, violence and recalcitrant subversive and anti-democratic witch hunts amid further allegations of Russian Influence or election malfeasance. The media in my belief will do irreparable harm to political dialogue in the US…. should be a nice trade if you are sitting on the right side of an unexpected victory.

    The contrarian in me demands me to come out and call it – Trump will win this election. There is a slim possibility for an even worse result, that it may result in another hung election, with accusations of vote rigging and illegal voting, etc, but imho the narrative pushed by the media is false, and the real underdog is Biden.

    • I guess its more about how or who butters your bread E.g. Trump was quite vocal about his stance on supporting equities at all cost, even using the bully pulpit to harangue the FED chair, whilst simultaneously rolling back or stripping all regulatory forbearance, government oversight, and labour rights that even Raygun would be envious of …

      Biden on the other hand is just Hillary in a cheap old man suit pushing for non traditional nuclear family idpol axes in a market place setting to advance its agenda – think coons cheese E.g. international investors concerned about PR and profits in a Bernays reality.

      Funny that the old sorts pushing against conservative esoteric views were dead set against monetizing [corporatizing] it because they understood the dynamic would take over and then every other aspect of humanity would be reduced to a price signal.

      • Stewie GriffinMEMBER

        I’m looking at the question objectively through the lens of a theory that every popular narrative pushed by the media is objectively false – what is the use of having a theory if you are not prepared to come out and put it into action or stake a position based upon it?

        Your descriptions of both Trump and Biden are accurate, but the question isn’t about who I support or why – it is about who I think will win. They are separate issues. I’ve gone to look for reasonable counter evidence to the popular narrative that Trump will lose. Hence the polls I linked as opposed to meandering about as to how I feel about Trump and Biden.

        My theory is that the media creates false bubbles – its purpose is no longer to report accurately, but to generate news or “business” for itself. What will be better for “business” over the next four years?

        Accurately reporting that Trump is likely to win OR creating a false expectation that Trump will lose, followed by another 4 years of outrage and trumped up investigations and accusations, all designed to both generated “business” and undermine faith in the US and all its institutions?

        • “I’m looking at the question objectively through the lens of a theory that every popular narrative pushed by the media is objectively false – what is the use of having a theory if you are not prepared to come out and put it into action?”

          Did you miss yellow journalism back in the day or the consolidation of “independent journalism” due to market forces or is it just that its not pushing your own bias agenda?

          “Your descriptions of both Trump and Biden are accurate, but the question isn’t about who I support or why – it is about who I think will win. They are separate issues. I’ve gone to look for reasonable counter evidence, hence the polls I linked as opposed to meandering about as to how I feel about Trump and Biden.”

          The only thing to watch is the electoral collage numbers, not that some rigging goes on in the land of democracy … whips tear from eye over Roves on screen election spastics on foxnewbs during the Obummer ascendancy.

          What you call media today is just a business which responds to market forces in the pursuit of profit though eyeballs and then equity to the right sorts, albeit some pensioners and SMF sorts have exposure with expectations and its trickle down economic effects.

          • Stewie GriffinMEMBER

            Did you miss yellow journalism back in the day or the consolidation of “independent journalism” due to market forces or is it just that its not pushing your own bias agenda?

            Really? I honestly can’t believe you think a muddle headed idiot like me has an agenda as opposed to a simple dubious opinion? If it was about pushing my own agenda then, I as an anonymous and dubiously viewed poster on an obscure economics website, have sweet FA chance of influencing absolutely anything. FFS what the FH do you think that “agenda” might be? ROFLMAO.(this should be good).

            Anyhow, I don’t have the energy to discuss this further with you (I have ribs on the BBQ that need attending) – as to you your other points and my staking a position on Trump winning, I guess we shall see very shortly.

          • Respond to the information and stop personalizing, yes you have an agenda, that is OK as long as your honest about it or stop wanking on about the media skewing information.

        • DominicMEMBER

          As an aside, I placed several bets on Trump to win ahead of the 2016 election — for the same reason as you suggest: I felt strongly he was going to win – no other reason. Ever since then, all people who knew about the bets have had me marked as a ‘Trump supporter’. They are utterly incapable of discerning the difference between placing a bet on probabilistic grounds and actually supporting the candidate on whom the bet was placed. To this day, no amount of clarification of the situation has been able to dislodge this view. A phenomenon a psychologist should get their teeth into!

          • Trump for various reasons which have zero correlation to your bias confirmation antics E.g. a symptom and not the underlining reasons. Trump not unlike Obama ran on a non traditional PR campaign to target both disaffected economic people and to assure the investor classes, both ultimately threw the weaker political voters out the window at the first opportunity because it did not forward their personal family fortunes – so Roman and so Ancien régime.

            But for illusionist reasons you side with Trump>

          • Stewie GriffinMEMBER

            I hear a lot of pontificating….and yet you are still to offer an opinion as to winner of the election yourself Bull-Bar fodder. (ribs have been checked and found to be coming along nicely).

          • DominicMEMBER

            You’re over-thinking it Skipster — I have trading floors in my professional background which means I have a tendency to look at the world through the lens of probabilities a lot. When a prospect is offered at 5-1 in a 2-horse race, it’s worth taking a closer look, especially when the other prospect is a 3-legged nag. It’s that simple.

          • Overthinking … mirth … considering how undemocratic the U.S. has become makes it problematic at best.

          • DominicMEMBER

            I don’t give a rats about the outcome of the US election but if there are some interesting odds available I’m all ears. 😉

            As an aside, I came across an interesting ‘predictor’ of the US election with an 87% success rate (thus far) – may be worth a gander. This predictor as accurately predicted 20 of the last 23 US elections. Simply put, if the stock market is up over the 3 months directly before an election, the incumbent wins — if it’s down the challenger wins. Worth keeping an eye on. Start counting from Aug 3rd.

          • Then some bemoan anti free market influences … rim shot …

            Lmmao at Miltion and the Chicago school waxing about the unwashed voting for more UBI increases as a market based rational agent model … did anyone say look up – ????

      • Stewie GriffinMEMBER

        Cheers Robert – being an open minded contrarian is a tough gig. Glad you appreciated it.