Welcome to the Mclowd Community Newsletter.
A giant new renewable energy fund of US investor BlackRock has selected innovative Australian electric vehicle charging firm JOLT Charge as its first investment in the sector in Asia-Pacific, kick-starting a $500 million rollout of 5,000 free charging stations.
BlackRock funds to supercharge JOLT, AFR Aug 24th
Like many of those who are enduring extended lockdowns, I am sitting in front of my computer in my home office.
I can see from the app on my phone that the lithium-ion battery in my laptop is being charged up courtesy of the solar panels on the roof, along with the same lithium-ion battery in my car in the garage.
Regular subscribers to the Mclowd Newsletter will be aware that the reason this scenario has come about is because the marginal cost of charging up those batteries is precisely zero, so the cost has fallen to zero.
In a manner similar to the network of charging stations being funded by BlackRock, the process by which solar energy is converted into electrons, then stored and subsequently consumed has been demonetised.
The government of El Salvador recently announced that Bitcoin is to be accepted as legal tender, with consumers able to transact and convert cryptocurrency back and forth between US dollars (via existing digital channels and dedicated ATM machines on the ground).
While aided by the fact that the country does not have its own currency, the main reason that El Salvador has taken a leadership position in this revolution is because the country is heavily reliant on remittances from the Salvadorean diaspora.
As a consequence it has been estimated that some US$400 million in transaction fees will be saved each year from the move (equivalent to almost 1.5% of the country’s entire GDP).
While seemingly unrelated, the acceptance of cryptocurrency as legal tender in South America and the diffusion of renewable energy technologies are two sides of the same coin.
And both sides of the coin are embossed with the word DEFLATION in bold letters.
Trust and Confidence
The response of politicians and central bankers to this deflation has been to borrow and print increasing amounts of money (having realised that they can do so without even managing to hit their inflation targets).
As a consequence we now have the rather strange situation where payroll numbers in Sydney have fallen some 10% during the city’s lockdown, while at the same time NAB economists are predicting house price growth of 23% this year.
There was a time when such a statistic would have bouyed confidence in the economy. However the fact that SMSF Trustees and other investors are pouring hundreds of millions of dollars in capital into crypto indicates that those policies are now steadily (and not surprisingly) eroding trust in fiat currencies.
Instead of placing their faith in Dr Lowe – and the institutions he represents – they are placing their trust in a network of computers.
Those central bankers would do well to understand that the above process (by which trust is eroded) is a slippery socio-economic slope from which it is difficult to revert.
This week also saw the announcement from online trading platform Stake that they will shortly be providing CHESS-sponsored share trading for the princely sum of $3 per trade.
This is some 70% less than the price charged by SelfWealth, which in turn is some 50% cheaper than Commsec. Again regular subscribers will be unsurprised by this rampant per-unit price deflation.
But unfortunately the same cannot be said for SMSF accounting software, where incumbents continue to use their pricing power to extract ever more value from customers.
As I said in our most recent webinar, I remain open to any and all conversations (as to the governance of Mclowd) that would enable us to provide a greater level of price competition in that market.
Mclowd Group Pty Ltd