Welcome to the Mclowd Community Newsletter.

The Fed also announced recently that it would start to buy exchange-traded funds that hold a diversified portfolio representing large parts of the more than $9 trillion corporate bond market and would move on to buying corporate bonds directly “in the near future.” Since such bonds serve as the basis for new borrowings, this lowers the cost of raising money for corporations tapping the bond markets.
Too Big to Fail: The Entire Private Sector, NY Times May 21st


The Reserve Bank of New Zealand recently commenced discussions with the banks operating in its jurisdiction about getting their systems ready for the advent of negative interest rates, which they have indicated ‘will become an option’ early next year.

At the same time markets are pricing in a better-than-even chance that our own RBA will cut rates to 0% at their meeting next week.

Negative interest rates are a proxy for an economy which is incapable of servicing – let alone repaying – its outstanding stock of debt.

They should also act as a reminder to SMSF investors and their advisers that the returns of the last twenty years were not a reflection of underlying economic strength, but rather the accumulation of A$300 trillion in debt.

(An understanding that such balance sheet-driven returns were never sustainable was the key reason behind the founding of the Mclowd Community, since any material decline in nominal yield must inevitably be reflected in pressure as to costs).

Accounting Software Update

In addition to support for COVID-19 withdrawals, this month has seen us deliver further improvement to the handling of depreciation for direct property.

Users can now record a Division 43 capital works allowance as a deduction in the tax return, while excluding the same from the applicable Operating Statement Report. (The accumulated capital works allowance is also shown as a cost base adjustment in the Capital Gains Report when the relevant property is disposed).

In one of the larger projects being targeted for delivery this year, we have also rebuilt the logic regarding member and fund status, incorporating:

  • Member status history
  • Member account status history
  • Fund status

This will allow Practitioners and Trustees to:

  • Manage the departure (and as required arrival) of members during the course of a financial year
  • Have those events automatically reflected in period processing
  • Manage the wind up of a fund

That upgrade will be deployed next week (further details to be included in the Practitioner and Trustee updates).

All of the above features are incorporated into the Free Forever version, however we encourage users to consider the benefits of upgrading to Pro and Premium as their circumstances require.


Jerome Powell and the rest of the Jackson Hole Gang have spent the last ten years driving the yield on sovereign bonds towards – and in many cases beyond – zero, while dragging cash / TDs down in the process.

As per the above New York Times quote, they are now turning their attention to non-government debt.

(Although I have no idea why, because Japan has been singing from that macroeconomic hymn sheet for years – using vast amounts of public money to buy up stocks and bonds – and yet is in the grip of both deflation and recession).

At some point they will all finally grasp the fixed nature of our Zero Marginal Cost destination.


Ashley Porter

Managing Director
Mclowd Pty Ltd