Future Fund Buys Gold Amid ‘Permacrisis’.
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast site, my own website, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at www.businessacumen.biz
I am Leon Gettler. My job is to review and monitor the week’s news in business, finance and economics. I bring it all to you, every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 41 in our series for 2025 and today’s date is Friday November 21.
First, I’ll be talking John Karabin, senior director of Cyber Security, NTT Australia on how businesses need to actively invest in emerging technologies that bolster the foundation of their cyber security and to be one step ahead of threat actors.
And I’ll be talking to AMP Capital chief economist Shane Oliver about the RBA holding off on interest rates and if or when we can expect another rate cut.
But first, let’s talk to John Karabin
So what’s happening in the news?
This week on Talking Business: Jeff Bezos is back in the operator’s seat — and not at Amazon. The Amazon founder is diving headfirst into the A.I. race with a new start-up called Project Prometheus, where he’ll serve as co–chief executive. The company is launching with a jaw-dropping $6.2 billion in funding, making it one of the most heavily financed early-stage start-ups we’ve ever seen. It’s Bezos’s first formal management role since stepping down as Amazon CEO in 2021. And while he’s stayed busy with Blue Origin — and, yes, a very high-profile personal life — this move plants him squarely in the middle of the increasingly crowded fight to build next-generation A.I. Project Prometheus is aiming at the intersection of A.I. and the physical world: engineering, manufacturing, aerospace, even automotive. Bezos is teaming up with Vik Bajaj, a scientist and former Google X leader with a long track record of moonshot projects. The company has already hired nearly 100 people, many from top labs like OpenAI, DeepMind, and Meta. And they’re not alone. A wave of new start-ups — like Periodic Labs and Physical Intelligence — are racing to apply A.I. to real-world scientific discovery, robotics, and drug design. But with billions already in the bank, Prometheus may have the firepower to pull ahead.
Bitcoin is having a brutal month. The OG crypto has shed hundreds of billions in market value, dipping below $92,000 — its lowest point since mid-April — after hitting a record high of more than $126,000 just six weeks ago. And the weird part? No one really knows why. Even Bloomberg put it bluntly: Bitcoin has fallen “fast, hard, and with no clear trigger.” One big theory: investors are losing confidence that the Federal Reserve will cut interest rates next month. When rates stay high, money stays tight — and people get skittish about risky assets like crypto. As one analyst put it, “the general market is risk-off,” and crypto was “the first to flinch.” Others say it’s a mix of things: long-term holders cashing out, institutions pulling money, macro uncertainty, and a wave of leveraged bets getting wiped out. In short, the market finally picked a direction after months of drifting sideways — and unfortunately, that direction is down. This slide is also shaking up the idea that Bitcoin acts as a hedge against inflation. Its crash is happening right alongside a broader sell-off in the AI sector. And to make matters worse, the recent U.S. government shutdown delayed key economic data, leaving investors flying blind. Some analysts warn the pain may not be over. If the stock market rolls over, Bitcoin could revisit the low $70Ks — maybe even dip below. All this comes despite President Trump throwing his full support behind crypto this year, from deregulation to floating the idea of a strategic Bitcoin reserve. But even that enthusiasm can’t offset the bigger issue: growing economic uncertainty that’s pushing investors away from volatile assets — uncertainty that, ironically, stems in part from the administration’s own policies.
Now, let’s jump to Australia, where things have gotten… lively. After weeks of internal brawling, the Coalition has struck an agreement on a new climate and energy policy — and they’re essentially dumping the commitment to net zero emissions by 2050. They also want to scrap Australia’s current targets: a 43% emissions cut by 2030, and at least 62% by 2035. The Opposition is framing this as kitchen-table economics. The pitch is: Labor’s net-zero policies are driving up energy prices, pushing small businesses to the brink, and hurting families already dealing with a cost-of-living crisis. Nationals leader David Littleproud even said this debate isn’t about science — it’s about economics. But politically, this is risky. Climate policy has been a major weakness for the Liberals in suburban seats — most of which they’ve lost since 2022. And the teal movement seems ready to pounce again. Climate 200, the big funding vehicle behind many teal independents, raised $600,000 in just a few days after the Coalition signalled it would dump net zero. That’s three-quarters of what an independent candidate can legally spend in a full campaign under the new rules. At the same time, the Coalition is worried about losing voters to One Nation on the right. And we got a big hint of where they’re headed next: Opposition Leader Sussan Ley says the next major announcement will be around migration — and specifically, cutting it back sharply. Polls show voters increasingly anxious about migration levels, and One Nation is rising, giving the Liberal Party’s more conservative National Right faction real influence over policy. Andrew Hastie — who left the frontbench so he could openly oppose net zero and higher migration — has already flagged migration as the next big fight.
But here’s the twist: while politicians are gearing up for a climate showdown, Australia’s biggest energy companies are saying the opposite. A report out Monday from the CEOs of more than a dozen major electricity providers — including AGL, Origin and EnergyAustralia — essentially warns: walking away from net zero will raise power bills, not lower them. Their argument is simple: most of Australia’s remaining coal plants are old, unreliable, and closing anyway. Whether or not the country is aiming for net zero, they need to be replaced — and the cheapest replacement is renewables backed by batteries, pumped hydro and gas. AGL has already brought forward the closure of its Bayswater coal plant to 2033. Loy Yang A in Victoria is closing by 2035 — up to ten years earlier than planned. And Origin now intends to shut Eraring, the country’s biggest coal plant, in 2027 instead of 2032. The industry stresses this transition isn’t free. Building wind and solar farms, battery storage, and the thousands of kilometres of new transmission lines we’ll need — all of that will push bills up in the short term. Electricity prices, they say, are already under huge pressure, especially as network upgrade costs climb. But the key message: extending old coal plants or trying to build new ones would cost more. CSIRO modelling shows that even with all the extra infrastructure factored in, renewables come out slightly cheaper on a per-megawatt-hour basis than new, modernised coal. Investors are also unimpressed with the Coalition’s plan to abandon net zero. Big funds — including BlackRock, Neoen and Macquarie, represented by the Clean Energy Investor Group — have called it “material and disappointing.” They’ve poured billions into energy transition projects under the assumption that Australia would maintain stable climate policy. And super funds like HESTA say long-term certainty is critical. Without it, Australia risks scaring off global investors who bankroll major energy projects. So, on one side: the Coalition is betting that tighter household budgets and rising bills will make voters more sceptical about net zero. On the other side: the energy industry, investors and most economists are saying the opposite — that renewables remain the least-cost path, and that ditching net zero would actually make Australia’s energy transition more expensive and more chaotic.
Australia’s Future Fund is sounding the alarm — but it’s also telling us exactly how it plans to navigate what it calls a “permacrisis.” So here’s the big picture: the Future Fund, which manages a whopping $261 billion, has put out a new 17-page position paper. And the message is pretty simple: the world is now permanently perched on the edge of some kind of crisis, whether it’s geopolitical tension, inflation, climate shocks, or the weaponisation of trade. Because of all that, the Fund says it’s re-engineering its entire investment strategy to build something it calls resilience. Not safety. Not maximising returns at all costs. Resilience — the ability to absorb shocks and keep growing steadily even when everything looks messy. So what does “resilience” look like in practice? Well, the Fund is:
- Buying more gold — it’s already got about $1 billion in gold, and with prices up 50% this year, they see it as a solid store of value when monetary systems look shaky.
- Hiring active fund managers again, especially in Australian small caps and Japanese equities. They think active managers will outperform passive strategies in an era where markets are less predictable.
- Leaning into “quality” stocks — companies with pricing power that can pass on higher costs.
- Favouring the Australian dollar, which they view as a commodity-linked inflation hedge.
- Avoiding nominal, fixed-rate bonds, because in high-inflation environments, those bonds tend to get crushed.
- And they’re continuing to build their portfolio of infrastructure and real assets, like Sydney Airport, Transgrid, data centres, and accommodation assets — all of which tend to have inflation-linked cash flows.
The Fund’s analysts break inflation into buckets — demand-driven, supply-driven, and monetary — and they argue that each affects asset prices differently. The scary part? There’s no one perfect hedge. And once inflation gets above about 5%, history shows that nothing reliably protects investors. That leads to their biggest fear: stagflation — low growth and high inflation at the same time — which they say has historically been “terrible” for returns. Future Fund CEO Raphael Arndt uses some pretty striking language. He says the world is sitting on a “perpetual inflection point,” or what he calls a permacrisis. He lists everything from trade tensions to inflation to rising capital costs, and says these challenges have basically shattered the old assumptions investors relied on: things like low interest rates, globalisation, the free flow of capital, and the classic 60/40 portfolio. And that classic 60/40 mix? The Fund says it just doesn’t work in a high-inflation world because the negative correlation between stocks and bonds — the thing that made that strategy safe — breaks down. In high inflation, both can fall together. The Fund also warns that diversification isn’t the magic bullet it used to be. In a world where regional conflicts can spill over quickly, simply spreading your investments across a region might not protect you much at all. What’s interesting is that the Fund admits that its own portfolio was tilted toward doing well when inflation falls — which makes sense given the last 30 years — but that left it exposed when inflation started rising. So they’ve been reshaping the portfolio to handle that better, especially since their mandate is to deliver 4–5% above inflation without taking on excessive risk. And despite all the uncertainty, the Fund’s numbers are strong:
- Over the last three years, it’s delivered 10.6% versus a target of 7.6%.
- Since its founding in 2006, it’s returned 8%, ahead of its 7% target.
The upshot? The Future Fund is betting that the next few decades won’t look like the last three. Instead of chasing alpha, it’s building durability — and it wants investors to understand that resilience is the new black.
Today on Talking Business, we’re taking a closer look at a worrying trend in Australia’s consumer credit market — because the numbers are telling a story regulators really don’t like. Financial watchdogs say more Australians are going bust, and a big part of the problem comes down to bad car loans and rising personal debts. New figures from the Australian Financial Security Authority show personal insolvencies have jumped to their highest level since Covid. More than 12,200 Australians went bankrupt in the 2025 financial year — that’s up 5.3% on last year, and nearly 25% higher than the lows we saw back in 2021. And AFSA is warning this isn’t the peak. They expect personal insolvencies to keep climbing — possibly hitting almost 13,750 cases by 2027 as cost-of-living pressures continue squeezing households. AFSA boss Tim Beresford says what’s most concerning is that these bankruptcies are early signs of what he calls “weakening financial resilience.” According to Beresford, one in five debtors basically had no buffer at all — less than a 10% asset-to-liability ratio. In plain English: one financial shock and they were underwater. He says a lot of these bankruptcies involve people with less than $50,000 in total debts — often personal loans or car finance — and many of those borrowers were already vulnerable. Other worrying signs? Almost half of all bankrupts had a Buy Now Pay Later loan, and subprime lenders are stepping in as traditional lenders tighten up. And that’s where ASIC comes in. They’re running a deep dive into the booming non-bank lending market — everything from car finance to non-bank mortgages to small-business lenders. Last week, ASIC put the car-loan industry on notice, saying lenders are using high-pressure tactics, high fees, and terms that are anything but transparent. Commissioner Alan Kirkland pointed out something pretty staggering: almost half of the people who default on their car loans do so within six months. He says that raises serious questions about whether these loans should’ve been offered in the first place. ASIC’s already taken at least one dealership to court over alleged unlicensed lending, and more actions are expected. Now, here’s the twist: even though personal and corporate insolvencies are rising — corporate failures are at their highest level since records began in 1999, with 14,700 companies collapsing in 2025 — the big banks aren’t feeling the pain. In fact, the banks posted a combined $29.8 billion profit last year. Their loan losses remain tiny — barely 0.04% for Westpac, Macquarie, and ANZ — far below the levels we saw in the early 1990s recession. ANZ chief Nuno Matos even suggested the bank may have been too cautious and could afford to take on a bit more risk. So what’s going on? Why are households hurting but banks aren’t? Fund manager Hugh Dive says the answer comes down to two things: APRA’s strict lending rules, and the rise of private credit and non-bank lenders. He says banks have been pushed out of the riskier end of the market — the “sketchier credit,” as he describes it. That stuff now sits with private lenders and credit funds, where oversight is much lighter. Dive says these private credit funds are under real pressure, and we’re seeing signs almost weekly — loans going bad, debt being swapped for private-equity stakes, and funds getting dragged into property developments they never intended to take on. And because they’re not regulated like banks, they’re slow to mark these losses properly. Banks, meanwhile, have something else working in their favour: low unemployment. As Dive puts it, “If you’ve got a job, people will keep paying the mortgage.” And that’s helped keep the banking sector’s credit losses at historic lows. So, to sum it up: households are struggling, non-bank lenders are taking on more of the risky credit, and regulators are scrambling to deal with a rising tide of bad debts — while the major banks are sitting comfortably on strong profits and very clean balance sheets. A two-speed credit market… and a big regulatory challenge ahead.
To sum up:
Bezos is back — launching a $6.2B A.I. start-up called Project Prometheus, targeting real-world engineering and manufacturing, and poaching talent from top labs.
Bitcoin’s sinking — down below $92K with no clear trigger, as markets go risk-off and doubts grow about Fed rate cuts. Analysts warn it could slide into the low $70Ks.
Australia’s Coalition is dumping net zero, scrapping emissions targets and shifting hard on migration — a risky political move as teal independents re-mobilise.
But energy giants disagree — AGL, Origin and others say abandoning net zero will raise power bills because renewables are still the cheapest replacement for ageing coal. Investors warn policy backflips threaten billions in projects.
The Future Fund sees a “permacrisis” — and is repositioning for resilience: more gold, active management, real assets, fewer fixed-rate bonds.
And households are hurting. Personal bankruptcies are at post-Covid highs, fuelled by bad car loans and Buy Now Pay Later debt. Regulators are cracking down on non-bank lenders — while the big banks, protected by strict rules and low unemployment, barely feel a thing.
And next week, I’ll be talking to Matthew Forzan, the founder of Yoghurt Digital. He has nearly two decades of industry experience. He is a seasoned digital marketing professional with deep expertise in Search Engine Optimisation (SEO), Paid Search & Social Marketing, and User Experience. Matthew’s mission is to help businesses boost their online presence and reach their full potential through targeted, high-impact digital marketing strategies. He has played a pivotal role in driving traffic and conversions for some of Australia’s top eCommerce and B2B brands such as RM Williams, Adairs, P&O Cruises, NRL, ANZ Bank and H&R Block
And I’ll be talking to Indeed economist Callam Pickering about Australia’s latest unemployment figures.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
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Looking forward to the next episode of Talking Business next week.
