MB Fund Podcast: Will Technology Driven Deflation be ‘The Price of Tomorrow’? With Jeff Booth

Join us as we discuss Technology’s ever-growing role in the world, the resulting deflation it will generate, and the major structural changes to the economy as we know it caused by this. We discuss these changes in industries it’s already happened in, as well as some likely candidates such as energy and automotive. We wrap up with a discussion around the solutions to these structural issues and the investment implications of this going forward

In today’s investment webinar MB Fund’s Head of Investments Damien Klassen, Head of Financial Advice Tim Fuller and Jeff Booth discuss Jeff’s #1 best seller “The Price of Tomorrow. Why Deflation Is The Key to an Abundant Future” and the conclusions that can be drawn from it.

 

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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

    • Productivity-driven deflation is desirable as it allows our salaries to buy more goods. If our salary allows us to buy more goods then we improve our standard of living – that’s obvious. Price deflation in this instance is a sign of a healthy economy (contrary to contemporary economic doctrine).

      Deflation, as a function of a credit bust is not desirable because of how damaging it can be for an economy, but credit busts are a natural consequence of a debt-based money system and that’s what we have currently. Until that changes the problems we experience today (based on extreme boom/bust cycles) will continue.

      • – It seems “Dominic” is still believing the Austrian School claptrap. I think the 3 years you studied “Finances” are wasted time and money you could have put to more usefull use.
        – Rising productivity decreases demand. But this reduction in demand didn’t show up because consumers in every country took on more and more debt (= extra demand) in the last say 30 to 40 years.

        • Jebus Willy, I don’t know which ‘school’ of economics you studied, but it’s none that I (or anyone else here) would recognise.

          But you are right on one point – my years studying finance were largely useless (outside of securing me a well paid job, of course) as everything of any use I learned was in the job itself and, of course, I was taught Keynesian economics too at Uni, which is akin to financial Scientology.

  1. – It’s clear to me that both Damien & Jeff have the wrong idea about INFLATION & DEFLATION. And then draw the wrong conclusion(s).
    – Deflation is NOT the same as Falling prices. Falling prices are required to get Deflation. The opposite is also true. To get inflation rising prices are required.
    – A good example is the australian property market. People saw property prices rise and wanted to also “make a buck”. So, “specufestors” took out debt to invest/speculate in property. Remember the term FOMO ???
    – The REAL HARDCORE DEFLATION is still up ahead of us when interest rates are going to rise.
    – People are looking at e.g.Argentina or Turkey and they say that these countries are going through Inflation. This is the most horrible nonsense. When I look at the financial metrics of both countries then I see DEFLATION written all over the place.

    • So, not only do you insist that you are short the USD when you are LONG US Treasuries you are now saying that Turkey and Argentina are suffering DEFLATION? Extraordinary. Where were you educated, bud?

      • – Is all this a bit too Original for your braincells ?
        – Inflation is defined as an increase of credit and/or money (NOT as rising prices). But rising prices are REQUIRED to get to (credit) inflation.
        – Deflation is defined as a decrease of money & credit. (NOT as falling prices). But falling prices are REQUIRED to get (credit) deflation.
        – What’s happening in Argentina & Turkey is quite clear. Money has fled those countries (= decrease of money = deflation). Interest rates have risen (= deflation).
        – Import prices (as a result of a weakening currency) have gone (much) higher while wages have remained flat or have gone down. This means that more and more households and companies can’t afford to pay principal & interest. This leads to a rising amount of (loan) defaults (= deflation).

      • – Over the years I have educated myself. Read A LOT OF (web-)articles. Where the opinions & thoughts “collided” I had to use my own braincells to find out who was wrong and who was right. And then you’ll find out that each economist has a small or a large part of the economic puzzle. And all those small pieces put together, helped me to build – bit by bit – the larger picture of the economy and all its intracacies.
        – I also learned – bit by bit – that A LOT OF people fail to understand the true characteristics of both inflation and deflation. And one “Dominic” is still par of those (“A LOT OF people”).

        • Chillax bro. You carve your path, I’ll carve mine. Do you really think I give a rat’s ar$e if someone’s ignorance leads them into poverty? In fact, it’s essential that that is the outcome. I‘m not preaching to people – I just offer my opinion and if someone disagrees then no problem – doesn’t impact my life.

          Good luck!

  2. Both arguments fail because they dont account for the finite resources on planet earth, killing the resource base is deflationary even though the output can be short term inflationary. e.g. Higher power prices driven by coal burning can be inflationary but the environmental consequences are long term deflationary. As a planet we are in an environmental deflationary phase and money won’t outrun this.

    Both arguments have to solve the resource base issue 1st as you can’t eat solar power or a 3D printed carrot. If you can get zero consequence power along with molecular reconstruction of all key elements then our choice merely becomes which things do we make.

  3. Very interesting discussion! On the question of the value of work today vs. work tomorrow, wouldn’t that depend on investment returns as well as inflation? After all, we keep hearing that $10,000 in super today will be worth $30,000 at some point in the future, etc.

  4. RanganutsMEMBER

    I am half way through this podcast, (only chance I get to listen to it is driving to and from work), but so far really enjoying it. Whilst I used to think that increased competition, (and the pursuit of volume), was pushing prices down in my industry I can see how Jeff’s take on the world could well be driving it. Makes sense to me.

  5. At first pass I’d wager the magical thinking of MMT favours inflation, if not hyperinflation.