Gone Fishing

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Jackson Hole

Not exactly convenient, Jackson Hole. I’ve often wondered why the Federal Reserve decamps to the middle of Wyoming every year when their head office is on the other side of the country.

It turns out that in the early 80s, the hosts of the conference wanted to attract then Fed Chairman Paul Volcker. He loved fly fishing and Wyoming is an outstanding venue. It worked, he turned up, and it’s been there ever since. 

In this year’s edition we got an update from the Fed Chair on their “Statement of Longer-Run Goals” which comes around every five years. The wording was very similar to previous version except for a subtle shift of emphasis to employment:

“Durably achieving maximum employment fosters broad-based economic opportunities and benefits for all Americans……..employment may run above real-time assessments of maximum employment without creating risks to price stability.”

Perhaps the Fed is seeing something or anticipating something that will need intervention. The current rate of inflation in the US is 2.7%, substantially over the 2% target and yet the market judges a 95% change of a September cut. 

Their long term language is now all about employment. They aren’t stupid. They know what’s coming. 

So what is coming?

“For ten thousand years, all labor was performed by metabolic engines called human beings. We require sustenance, shelter, rest, and a complex social structure to function. Our economic value was inextricably tied to our biology. AI and robotics are non-metabolic labor. They require only electricity. They have no biology to support.

This is why this fourth inversion is final. When hands became obsolete, we pivoted to our minds. But when our minds are out-competed by a form of labor that does not need to eat, sleep, or live, there is nowhere left to pivot. We are not just facing a more efficient competitor; we are facing a different category of economic life.”

Can’t say I entirely agree with this “nowhere left to pivot” view. Even so, if it's half true the Federal Reserve is going to be right and all the pressure will be on labour markets while the production of goods and services simply gets cheaper because machines are doing it.

The Australian Government’s labour market survey takes a different view. Every single category of worker is projected to increase in the next five and then the next ten years. Seems unlikely, but you never know. 

Rotation 

Significant rotation to ETH from BTC recently. The ETH ETFs are gaining some traction and would clearly be benefitting from the Genius Act. We would expect some stable coin issuance to take place on that platform. 

The stablecoin roll out is important. We need to see them embedded in the global financial infrastructure in the next few years. Total volume is already in excess of $27 trillion which is roughly equivalent to the total value of global trade in goods and services. Can you run an economy on stablecoins? Well from a total value exchange perspective the answer seems to be yes. 

While it pains me to say it, this article from the dreaded McKinsey and Company is rather helpful. 

Euro-Trash

Bottle top update time.

Oh dear. In a written question to the European parliament about bottle tops, it appears that bottle top pollution has risen as a result of the tethering requirement. The explanation is that Europeans are simply expressing their frustration with the insanity of it all by ripping off the caps and throwing them to the ground in furious anger.  

The letter is magnificent in its understatement

“According to data from the Keep Sweden Tidy Foundation, the number of plastic caps found per 100 metres of beach rose from 46 in 2023 to 144 in 2024. This is the first such increase in several years.”

144 bottle tops. In a year? 11 million people live there. Maybe it is actually working? 

Further Information

Our July 2025 report to investors can be found here.