I think there is a principle of conservation of computation in the universe that would not allow this.
Just like a system that takes some energy in cannot output more energy than what it took in, I think a simulation that takes some computational power in cannot output more computation than the original system is capable of.
If we had a simulation of the relevant aspects of the universe, of the mind, of computers, etc. that was capable of running another simulation inside it, in order to run the other simulation while still running itself it would have to double its computer power (or half its simulation speed), it would have to share computational power with any simulation running inside it, whether directly or nested inside another one. Without creating more computer power out of nothing it would soon come to the physical limits (or the computational limits) and would not be able to go further.
Just like a system that takes some energy in cannot output more energy than what it took in, I think a simulation that takes some computational power in cannot output more computation than the original system is capable of.
If we had a simulation of the relevant aspects of the universe, of the mind, of computers, etc. that was capable of running another simulation inside it, in order to run the other simulation while still running itself it would have to double its computer power (or half its simulation speed), it would have to share computational power with any simulation running inside it, whether directly or nested inside another one. Without creating more computer power out of nothing it would soon come to the physical limits (or the computational limits) and would not be able to go further.