Welcome to Finance and Fury, the Furious Friday edition.  

  1. Last week – went through the rise in billionaires in favour of additional socialist policies – went through why I think this is the case – I think that most of the billionaire class are in favour of calling for socialism due to it giving governments more control over the economy – and hence increases their political influence over the economy to benefit themselves
    1. Not true socialism – but a socialism lite version to help create additional barries to entry and to help monopolies the markets further
    2. More political power – greater ability for lobbyist to influence policy at the state and federal levels – hence additional benefits for the companies that they control through gaining additional corporate welfare
    3. Plus – the policies that will be recommended in the form of what those on the left want – like additional taxes will unlikely affect them – at least proportionately when compared to others –
      1. Taxes – they can move their wealth (or move away themselves) or employ tax minimisation strategies – like charities that their own relatives are the leaders of – to amas tax free wealth that gives out the minimum 1% requirement – so they appear to be philanthropic and get to save tax – win win – even paying out 10% is better than the standard company tax rate
    4. In todays episode – want to look at another potential benefit for the billionaires who are pushing for socialism and have the power the flow of democracy into this way of thinking – whether it be political or informational influence – through the owners of the platforms like Amazon, FB, Google (youtube)
      1. And why they are in favour of concepts like UBI as this will also benefit their companies

The first step – killing the competition –

  1. Through having additional taxes and regulations on businesses you can kill the competition
    1. You can see many billionaires talking about how they think companies and the wealthy should pay more tax
      1. But they never put their hand up to actually pay it – they could if they wanted to – but why don’t they? It is rhetoric – to get good PR at the least and at the most – have a greater burden on those these taxes will actually hit – the millionaire class and or the upper middle class
    2. That is where these regulations normally land – in the business world this is on the SME disproportionately when compared to massive multi-billion or companies worth over a trillion dollars
    3. The greater the level of state control – the harder it is for new up and coming businesses to be competition to those already established
    4. Plus – those that do pose a threat can be bought up – even though it might go against any anti-trust regulations – as a massive conglomerate company you can buy up any companies that are competition
      1. Can provide the political funding to have bling eye turned away from these laws and the effects
    5. But killing the competition starts to deteriorate the economy over time –
      1. With this – comes lowering employment opportunities – due to less companies – and people have less income – to spend on businesses
      2. Comes greater rates of poverty and the blame for economic woes gets placed at the feet of the free market – not the regulations that create the issues –
        1. The greater the power centralised entities have over any economy – in other words the more control they have – the worse the economic conditions for the population – this can come from Governments or companies –
      3. So the economy gets messed up – the younger generations get born into an economy that blames capitalism – they see economic inequality as the cause and not as a symptom – even through our economies are some of the more free economically in the world and with it higher level of living standards – so they look for policies that have been implemented in some countries and that have resulted in the deterioration of economies to be become some of the worst in the world
        1. The pipe dreams that this time it will be different never lose their appeal
        2. Younger people who use products of billionaires – they can also ironically like socialism – even though they consume like capitalists – just because people are telling them they can consume more through getting free money from the Government
      4. So you have this weird sort of bedfellows – younger people and billionaires together – both loving the concept of UBI
      5. there are any number of reasons for this – covered on Weds the concept of technological unemployment – this has been a big driver for things like UBI – particularly by the CEOs/owners of some companies that are those responsible for getting on the bandwagon of automation –
      6. look at any massive company – Amazon, Apple, Microsoft, Google – all on the forefront of removing humans from the working force – Amazon with drones to deliver, apple with robots for automation, google with self driving cars or their subsidiaries like Boston dynamics working on humanoid robotics – list goes on –
        1. as I went through on Weds – this is a natural cycle of creative destruction in any economy – but I am not in favour of is the thought that humans should be then delegated to a couch and given a UBI
      7. Of course, people would love free money – if someone says they are going to pay you $1k p.m. with no strings attached it is hard to say no – unless you can see the potential for ruin that may bring to society
    6. But why would billionaires want UBI – $12k to them is the equivalent of a nice dinner
      1. Well – I think they are pushing for things like Universal Basic Income – and for concepts like MMT to fund it – for their own benefit – as some of that money that is given to the population is likely to end up in their own pockets – in the form of additional revenues to their companies that provide the goods or services that people will buy
        1. The whole concept of UBI for economic growth relies on demand side economics – the basis of this is that the population will use the money that is given to them and turn around and purchase goods within the economy
        2. Who will be providing the lion share of these goods and services? At an aggregate level especially – the local corner store – or Apple with new iphone sales or Amazon with people spending their UBI funds on things that around going to be delivered to their doors?
  • The notion of demand side economics does actually increase economic growth – in the form of wealth for these companies – at a disproportionate rate
    1. It may materialise into economic growth – but over time it technically wont be growth – the concept of growth is that $1 turns into $2 through economic interactions – the concept of demand side economics through government models is you borrow $1 and you hope to get more out of it – but this is very hard to observe and with the level of debt around at the moment – theorised to be a diminishing marginal return – where $1 borrowed is about $0.9 of economic growth
    2. But this doesn’t matter to the billionaires – $1 borrowed by a government – or created under a world with MMT then does create economic growth to their own pockets
  1. This is due to if individuals do have more money – in the form of helicopter money – where may they spend it? With these large companies – if all smaller business are shut down or go out of business – then all that is left is Amazon, or apple – where people will spend their incomes from UBI – so this benefits their wealth long term as well
  2. But on top of this – it means they can get away with paying people less in wages –
    1. Companies like Walmart and Amazon have around 10% of their employees still on Federal assistance – like food stamps – so you could pay your workers $12k less p.a. if the Government is covering the bill
    2. It isn’t like you are going to be paying much in the way of tax – with corporate welfare – and tax minimisation strategies
  3. Once the governments has the legislative power to fund the population in their spending – and that spending is disproportionately spent with the people who support UBI – this is a major benefit to these companies
  4. There is also another potential side benefit – What happens if there is runaway inflation?
    1. Well – tangible assets soar –land and property, resources/commodities and shares
    2. What do the billionaire class own? Lots of physical assets – Land, gold, art, resources like timber and mining companies or transportation like railroads – as well as shares – all the tangible assets that will maintain or increase their value in runaway inflation
    3. So, their wealth can increase further – if interest rates need to increase to combat this – many billionaires personally don’t have the need for a lot of debt – unlike the average person now to buy the average home
  5. That is where the form of Socialism being called for is equally beneficial to the billionaires – they won’t lose their companies as the means of production like in real socialism – but instead benefit from it massively – to live parasitically off the government – which is actually fairly socialist – but the issue with this for us long term is that it gives rise for a form of neo feudalism
    1. Billionaires already live a form of neo feudalism – they live separately – in their own form of private communities with private services and security
    2. Examples of living standards – Dichotomy between areas that billionaires live – In the USA – the concentration is in very left leaning districts – but at the same time have the greatest level of inequality due to policies
      1. A lot are tech billionaires live in the San Francisco Bay Area – contains four of the ten most expensive counties in the United States – the decriminalisation of may crimes – last year saw Prop 47 – theft under $950 is a misdemeanour – non-arrestable offence that police no longer respond to – I watched a docu-series where they went around interviewing local business owners – some areas shop owners would have 2-3 thefts a day – losing thousands of dollars each day – again small businesses – even a police officer had their phone stolen from their car – didn’t bother reporting it –
    3. However – some certain post codes – those with the politically powerful and ultra-wealthy have hired their own private police forces and sanitation workers and anything that the government used to provide
  6. Economic policies that lean on the ideals of socialism will increase the speed at which neo feudalism can manifest –
    1. As the state borrows endless trillions to send every household $1,000 a month – if this borrow to spend – demand side policy pushes inflation higher – this means that it will strip away the purchasing power of the individual and with it how far a household’s income can stretch
      1. As has been seen – a $1,000 in UBI free money could turn into only buying $800 worth of goods and services in a few years, then $500, then in a decade that $1,000 may only be worth $300 in real terms – Then due to the cost of living going up – people and billionaires alike will cry for more money – and the UBI will need to go to $3,300
    2. With this – will be the cries for additional taxes as well – to help fund the UBI policy – whether it gets implemented is one thing – but even if it does – good PR and medias lack of reporting of real issues will lay the blame elsewhere will create a situation where things like a wealth tax can be implemented – but again – this won’t touch the intended victims – the billionaires – they will avoid the tax and instead – it will end up hitting professionals and entrepreneurs, not the billionaires

The issue with this style of policy – and billionaire support for socialism –

  1. Eventually the entire house of cards collapses– the economy crumbles and the reliance on governments intensifies – as the opportunities for jobs are destroyed around the way – except for the monopolistic companies which now have greater control over the economy through their market share and political influence –
    1. With this – they can continue to replace the structure that actually changes the way wealth was created for them and the pathways to ownership of capital – through the free market –
    2. the system that is ideal for them to create is a form of neo feudalism that will increase any existing inequality
  2. The concepts of MMT and socialism lite are just what billionaires really want – it will provide trillions to corrupt insiders through corporate welfare – in the form of industry giveaways with subsidies and carbon credits, etc. – provide additional incomes to the consumers of their products – and the negative effects of additional taxes will be escaped


  1. Moral of the story – don’t fall for the trap of listening to billionaires when it comes to thinking socialism and policies like UBI are needed in the economy
  2. Keep working and building your own forms of wealth – don’t get tricked by the PR campaigns

Thank you for listening to today’s episode. If you want to get in contact you can do so here: http://financeandfury.com.au/contact/

Is the ASX going to boom in 2020 thanks to Quantitative Easing?

Welcome to Finance and Fury Today – want to explore the chances of the ASX booming next year Have been talking about complexity theory for the past few Monday episodes – Focusing on collapses – but what if positive feedback loops kick in further – in the form of...

The evolution of share markets

Welcome to Finance and Fury. This episode will be a little lighter than normal – as we will be looking at the history of share markets – focusing on the ASX, to look at how we ended up with the system we currently have? Also be looking at the makeup of the ASX 100...

Nailing Business Cashflow Forecasts, whether you’re established, looking to expand, you’re a start up or a business in trouble

Hi Guys and welcome to Finance and Fury’s ‘Say What Wednesday’ Episode. Today we’re joined again by Nick. Our question today comes from Justin who asks, “Our building company recently went through issues with its cashflow, so as directors we halved our wages to help…I...

The Economics of War – conducted for the benefit for the very few, at the expense of millions

Welcome to Finance and Fury, The Furious Friday Edition. War is a racket – Something that always catches my attention is when politicians get on What is one thing they seem to get on about? Police enforcement, regulations on industries On a more global scale - Going...

Welcome to CHAZ! Is it the manifestation of a behavioural sink or a true revolution against authority?

Welcome to Finance and Fury, the Furious Friday edition. Been watching a very interesting social experiment play out – the rise of the nation of CHAZ – Capital Hill Autonomous Zone – If you haven’t heard about it – it is a LARP – live action role playing for an...

Are sectors of the US share market in financial bubble territory?

Welcome to Finance and Fury. Are sectors of the share market in a bubble, one in particular that comes to mind would be the US tech sector. There have been many bubbles in financial markets throughout history – if enough excitement is generated around some new asset,...

What allocation has the most consistent returns?

Welcome to Finance and Fury. Sorry for the sporadic episodes – flat out with EOFY - In this episode we look at different asset allocations and how they have performed over time in relation to their returns as well as their risk – with a final focus on their risk...

Furious Friday: Is social media at a tipping point?

Furious Friday Is social media at a tipping point? Today we’re looking at the market environment for Facebook, Google, Twitter, YouTube etc… their costs are going to far outpace what their revenues will be. Are they on their way up, or on their way down? EU copyright...

Furious Fridays: How the Fair Go mobilises Australians

Welcome to Finance and Fury the Furious Friday edition. This is part 4 of the mini-series. Hope you all had a good Christmas. In the last episode, we talked about how the population is mobilised in a political spectrum. Today we talk about what the population is...

The economic impact from the Russia-Ukraine conflict on financial markets

Welcome to Finance and Fury. I hope you are all doing well and safe at the moment – I know a lot of people in QLD and NSW have lost their homes and my thoughts go out to you - where we live is currently cut off – we are fortunate though – no flooding in the house –...

Pin It on Pinterest

Share This