Welcome to the Mclowd Community Newsletter.

Only with the inflation of the 1950’s (more than 4% per year) and above all the 1970’s (nearly 15% per year) did Britain’s debt fall to around 50% of GDP.
Thomas Picketty, Capital in the 21st Century, p133


In 1950 – having waged two world wars without recourse to the printing presses – public debt in the United Kingdom stood at 200% of GDP.

But as Thomas Piketty has pointed out, even with high levels of inflation (not to mention historically high levels of population and economic growth) it took half a century to erode the burden of the debt that had been accumulated.

As Australia moves to a war-time footing in order to tackle the socio-economic threat of COVID-19, the UK experience of the 20th century is indicative of what lies ahead.

However western economies of the 21st century exhibit very different characteristics to their 20th century counterparts.

In particular:

  • Instead of inflation eroding the real value of outstanding debt, it is the forces of deflation that are in the ascendency
  • Unlike the Spanish flu of 1918-19, economic activity is now skewed towards the fulfilment of ‘wants’ rather than ‘needs’

The reason the latter distinction is important is that if/when some degree of normality has been restored to our daily lives, it will be considerably harder to restore demand-side activity around those ‘wants’ (upon which so much income and employment is now dependent).

Accounting Software Update

The Mclowd Community has operated a remote workforce for both development and support since inception (spanning multiple time zones around the globe).

As such our day-to-day workflow has continued uninterrupted, with the following improvements in development or awaiting deployment:

  • Support for downsizer contributions
  • The ability to handle member churn (ie within a given financial year)
  • Mandating multi-factor authentication for all Practitioner users


As painful as the immediate impact of this crisis may be, my hypothesis is that it is the longer term implications that will be of greater import.

Even before recent events took hold, investors were living in a world where the preservation of capital (or even the perception of preservation) involved the absence of nominal yield. The burden of the public debts that are now being accumulated can only reinforce that trend.

As a consequence savers – including SMSF investors – can expect to be sacrificed on the alter of financial stability.

For generations to come.


Ashley Porter

Managing Director
Mclowd Pty Ltd