Still nothing

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Still nothing

Gleefully posted this week by Mr “software is eating the world” Marc Andreessen. He first wrote that line in 2011 in an article for the Wall Street Journal. It does not appear to be behind the paywall, so you can read it and weep (like I did) that you didn’t pay more attention to it 14 years ago. Apple, the bubble of the time, at 15.2x PE and has done 25x in value since.

Sounds slightly familiar. Anyway, despite the accuracy of his claim, in terms of the amount of GDP represented by software sales, it’s still tiny but recently pivoted upward. Our internal software spend has risen because of subscriptions to OpenAI, Anthropic and Grok. The return on that investment of a few hundred dollars a month is enormous too, surely better than anything else we spend money on. 

Andreessen was way ahead of his time in 2011 but I can’t see that graph stopping its trajectory of heading north at an increasing rate. He will be a lot more right in 2035 than he is in 2025 and even more so than he was in 2011. 

After all, “Everything’s Computer”.

The Mirage

Some new products in the land of fiat currency this week. They all tell the same tale, the value of fiat currency collapses far more quickly than anyone reports or realises. The whole story (and it is a story) of economic growth, rising real wages, is in many cases, simply a mirage. 

“Accessible to everyone” via 15 year car loans? I believe it is fair to say we have become extremely good at the manufacture of excellent, reliable vehicles. The price of cars over the last 30 years should have collapsed towards the x-axis if all the things we have been told are true, but they haven’t. For many Americans, and many in the Western world, they are prohibitively expensive. So, the U.S. is introducing a 15 year car loan. 

The average lifespan of a car is 12.5 years, unless you own a Toyota, in which case it is 250 years. Is the American Dream really one of owning a car in 15 years which is by then worth zero? 

In the same week we got 50 year mortgages! Apparently, they will lower monthly payments. In our example below, monthly payments drop by $270. The downside being the term and the monumental difference in overall interest cost for the life of the loan. 

Will it make it cheaper though? In theory, even if the buyer is 25 years old, are they going to be able to meet the payments at 75? Can a fixed 50 year interest rate possibly be as low as a 25 year rate? 

Yet, even though these products are on the face of it ridiculous. They aren’t. In reality you might be paying 6% but the nominal value of things is probably rising in fiat terms at over 10% - 12% every year. The 50 year mortgage might turn out to be the best currency short of all time. If fiat currency is as terrible as I think it is, then these products are a gift. 

Arguably these products are an offer to short the currency: “get ahead and short the currency for your whole life.” To which I respond, “Yes”. Yes, only because what other choice is there?

In Britain, a different kind of loan product is brewing, derived from energy prices. In five years the amount owed on energy bills has jumped from £1 billion to £4 billion. Clearly there are dual effects here, not just the general collapse in the value of currency but also in the supply of energy but still. You cannot fake energy and much is revealed in its price. I look forward to Britain releasing the “low interest energy mortgage”. 

Why is it that, with economic growth, technological growth and vastly more educated society, people cannot afford an electricity bill or a basic car and certainly not a home? Because fiat is a mirage. It’s a story and a giant fraud that lots of people are in on. They live warmly in its bosom. It suits nobody with influence to rock that boat. 

If you do have any issues, Australia’s banks are “here to help”

Commbank too.

The NAB. 

Help, it seems, is everywhere. That’s all part of the story of fiat though. Citizens! Don’t you understand? It helps you. 

A whole suite of new products then for the financialised parts of town to issue to everybody else. In reality it's a product for the old to issue to the young and the solution for young people is a simple one. Buy bitcoin. Keep buying it and then, one day simply turn around and say “pay me in bitcoin or I’m not doing it”. People laugh at me for saying it, they are bored of me saying it. I just hope they have some for when the day comes.

One thing is for sure. If you ask NAB, Commbank or Westpac to help you buy bitcoin. They will say “No”. 

I dream that one day the NAB calls and asks to buy some bitcoin from me. I will refer them to the help page on my website. There will be a picture of an attractive, happy family in a new home. There will be lots of links to click that go nowhere. It will be a mirage, a helpful one. 

Square

We used to get very excited when a payment processor adopted bitcoin. This week Square, the largest payment provider in the US (by number of merchants), added it. Flick a switch, accept bitcoin and receive bitcoin or USD.

Adoption matters. This, by its mere presence and simplicity, is going to help a lot. 

Cup week

I happened to look through past editions of MoneyBits to see if we had ever predicted the winner of the Melbourne Cup. Answer, no. In 2019 though we did write this in an edition called “Cup Week”. Scroll all the way to the bottom, we did pick a winner. Just not the Cup. 

One for the good guys

Another win for the good guys in Europe! A recent vote at the European Parliament now limits the amount that can be paid in cash to €10,000. Anything over €3,000 requires ID. It's not a huge change for most EU countries, it just standardises the limit. Any single cash transaction over the €10k mark will now be a criminal offence from 2027. 

For cryptocurrency transactions the rules are different though, ID will be required for transactions of €1,000 or more. The reason? There isn’t one. Just lower is better, that’s it. 

The idea, of course, is to prevent money laundering. Another huge strike against terrorism. Except the burden is on the 300 million Europeans who want to be left alone. They will now have to do stupid stuff like spray their passport all over the internet for no real reason. A massive admin burden that is really a win for terrorism. 

Has any terrorist ever done KYC? Do they show their driver’s license to their local arms dealer? Maybe they do. 

Anyway, here is an amusing story, that isn’t true, from an American in Europe. 

Euro-Trash

The tiresome explainers are back. The ECB left interest rates unchanged but explained that the Euro-area is struggling because of “tariffs, uncertainty and strong Euro”. I imagine that to be true but surely high energy costs, regulation and a collapsing economic incentive structure are bigger contributors. 

The problem is Germany. An economy destroyed by energy prices. The chart below shows the beneficiaries of German generosity over the course of the Euro’s life. The story of the Euro is one simply of Germany throwing €1 trillion at Portugal, Italy, Spain and Greece. 

The chart doesn’t lie. Now Germany has run out of money but Italy, Spain and Portugal have not stopped spending. They have growing deficits.  

Where will the money come from? The answer is simple, the ECB. Note the continual growth of the brown section at the bottom, ECB bond buying. More and more, and more. It will have special names, special acronyms to fit whatever emergency arises but it won’t really matter. It will be what it always was, a central bank monetising government debt.

Further Information

Our October 2025 report to investors can be found here.