Vikings, Tax Farmers, and the Butcher’s Son

The Timeless Five - Saturday, December 20th 2025

Arie van Gemeren, CFA Dec 20

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Happy Saturday Timeless Investors,

I wonder sometimes - what in the world would financial pundits have to talk about without the Federal Reserve? In preparing this article today, I’m “amazed” how much “digital ink” gets spilled discussing what the Fed may or may not do, what the Fed’s $40 billion purchase of Treasury Bills means (or it doesn’t). What are they thinking?

There are whole, feature-length articles dedicated to deciphering the Dot Plot (See below).

This week’s “big” story?

Thursday’s CPI came in at 2.7%, well below the 3.1% Wall Street expected. Core inflation hit 2.6% — the lowest since March 2021. Shelter costs, the stubborn third of the index that’s been propping up inflation for two years, finally cracked: 3.0%, down from 3.6%.

Markets rallied. Headlines celebrated.

But there’s one problem: the data is compromised.

The 43-day government shutdown meant no October data was collected. The BLS effectively assumed zero shelter inflation for an entire month, then measured November against that fiction. NY Fed President Williams admitted the numbers were “distorted... probably by a tenth or so.” Goldman Sachs called it unreliable. One inflation specialist called the methodology “totally inexcusable.”

So what’s the real story?

Zillow, Apartment List, RealPage — they’ve shown rent disinflation since late 2023. The CPI lags private rent indices by 8-14 months. Always has.

The Fed just projected only one rate cut for all of 2026. Seven officials wanted zero. They’re looking at backward-facing statistics as the rental market softens in real time. (see below). And because rent is a majorly lagging indicator (given the reporting timeline, and how the BLS compiles its info) we can expect inflation going forward to stay persistently lower.

If you believe the government data.

I commented on this entire debacle with government data reporting sometime back on the Timeless Investor YouTube Channel. Somebody replied that in the absence of government data, the private sector will just have to “fill in the slack.

You know what? That might be better. Once you factor in all the wonky factors behind the governments data, and the mere fact that the private sector is economically incentivized to discover the “truth” (whatever that may be), it just might be better.

And now onto the Timeless Five.

Let’s get into it, shall we?

When the Paradigm Flips

Arie van Gemeren, CFA · Dec 19

“I am probably the richest man who has ever lived.” — John Law, 1720

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Six months later, John Law was fleeing Paris disguised as a woman, terrified of being torn apart by mobs. His $6.5 trillion empire? Vapor. The paradigm had flipped.

This week’s premium piece is one of the most important I’ve written. We explore the pattern that’s destroyed investors for centuries — and the protection framework that might save you from it. Paradigm shifts don’t announce themselves. They feel like conviction. Like research. Like you’re being thorough.

And that’s exactly why they’re so dangerous.

Key insight: The facts don’t change. The frame does. Every piece of negative information gets metabolized into the existing story. Until suddenly, it doesn’t.

Blood for Farmland

Arie van Gemeren, CFA · Dec 17

June 8th, 793 AD. Dragon-prowed longships cut through the morning mist off the coast of Northumbria. Within hours, one of Christianity’s holiest sites was in flames.

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Thus began the Viking Age.

This is perhaps one of the great, age-old examples of exploration driven by a good old-fashioned “real estate crisis”.

Only 3% of Norway is arable land. Primogeniture meant eldest sons got everything. Younger sons got nothing. The math simply stopped working.

Almost all great, momentous events can trace their origin to the quest for land. The barbarian invasions of Rome. Hitler’s Lebensraum. The American westward expansion. And the Scandinavian farmers who became the most feared raiders in history — all because they needed somewhere to grow crops.

YouTube: The Rise of John Jacob Astor

It’s 1837. Banks are collapsing. Businesses failing by the thousands. Real estate values crater 80% overnight.

Most investors are wiped out. But a 74-year-old immigrant who arrived in America with seven flutes and $25 in his pocket isn’t panicking.

He’s buying.

John Jacob Astor’s estate at death? 1% of America’s entire GDP. Roughly $276 billion in today’s terms. Per capita, one of the richest human beings who ever lived.

This week’s YouTube episode traces his remarkable journey — from scraping fur pelts in a Lower Manhattan shop to owning more of New York than anyone else. The lessons are timeless: do the dirty work, build systems not just deals, know when the game is changing, and maintain liquidity for crises.

The best investments are made when others can’t or won’t buy. Astor understood this 200 years ago. Do we?

Podcast: The Business Model that Destroys Empires

Constantinople, 1595. The Sultan’s treasury is empty. Wars with the Hapsburgs have drained the coffers. The janissaries are demanding back pay.

The solution? Sell the right to collect taxes to private contractors called multazim. They pay upfront. Then they extract whatever they can from the peasants. Whatever they collect beyond what they paid — that’s their profit.

The problem? The multazim doesn’t care if farms fail next year. His contract is only for three years. He doesn’t care if peasants flee. That’s someone else’s problem. He’s not building an empire. He’s liquidating one.

By 1800, tax farming represented over 80% of Ottoman revenue. The empire hadn’t been governed for a century. It had been strip-mined.

This pattern — societies that stop building and start extracting are societies approaching terminal decline — is the same story that destroyed Rome, hollowed out Spain, and ended British hegemony. The question is: are we living through it now?

Builder’s Corner: Why Investors Need to Be Psychologists

Here’s a thread that runs through everything this week:

John Law controlled $6.5 trillion and still couldn’t see the paradigm flipping beneath him. The Vikings reshaped civilization because land scarcity created psychological desperation. John Jacob Astor thrived in panics because he understood that fear is temporary but fundamentals are permanent. The Ottoman multazim extracted because the incentive structure made extraction rational.

In every case, the outcome wasn’t determined by spreadsheets. It was determined by psychology.

The best investors I know aren’t just good at math. They’re students of human nature. They understand that markets are not machines — they’re collections of humans making decisions under uncertainty, pressure, and emotion.

If you want to be a great investor, don’t just study balance sheets. Study history. Study cognitive biases. Study what makes people do what they do — especially when they’re scared, greedy, or overconfident.

Psychology rules all. Especially in investing.

If you’ve been enjoying The Timeless Investor, share this email with someone who thinks in decades, not quarters.

Think well. Act wisely. Build something timeless.

— Arie

P.S. If you’re an accredited investor looking to deploy capital in supply-constrained West Coast markets while others chase narratives — let’s talk.

© 2025 Arie van Gemeren, CFA
548 Market Street PMB 72296, San Francisco, CA 94104
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