Category Archives: Life

HK Protestors with Pepe the Frog

Multi-Millionaires Clusters …

Source: ZeroHedge, Nov 2019

Signboard Honesty – Giving Money to Beggars



Source:, Nov 2019

Signaling is the act of conveying information about ourselves to people in a way that is costly for us and therefore believable. Without the associated cost of sending a signal, we would not be able to trust the information being sent. For instance, if it’s easy to signal that we are amazing without actually being amazing, then the signal would be comparatively worthless and no one would pay attention to it. Thus, effective signals take up a lot of time and energy, but are essential as a means of communication because the information they convey is trustworthy.

By understanding signaling, we can get better at efficiently conveying the information we want others to pick up on. We can assess if what we’re signaling is really worth the effort. We can learn to better detect what other people are indicating to us—and if it’s genuine or just a show.

Honest and Dishonest Signaling

We use signals because they are costly and therefore more believable than straightforward information. But that doesn’t mean all signals are “true”—they can be categorized as honest or dishonest. An honest signal means the signaler possesses the trait they claim. A dishonest one means they don’t. If a signal is easy to fake, it degrades the value of the trait it advertises. A picture of someone in a fancy car used to signal wealth. Now that we’ve all heard of people hiring expensive cars for a photo op, it just looks sleazy without other signals indicating they own it.


“An effective use of countersignaling requires finesse. Most importantly, the countersignaller must already hold some independent air of mystique.” — Tyler Cowen, Discover Your Inner Economist

A multibillionaire casually admits to eating at McDonald’s for breakfast every day. A powerful CEO shows up at the office in jeans and a hoodie. A middle-class mother sends her child to school in a pajama shirt with unbrushed hair. A New York Times bestselling author says, “Oh, I write books,” when asked what they do at a dinner party. A supermodel posts a candid picture without makeup or filters online.

These are all examples of countersignaling; the act of signaling something by not signaling that thing.

The essence of countersignaling is that those who do it feel no need to signal. The value of countersignaling is that it frees up time, energy and resources. Signaling correctly is an endless, exhausting process where one slip-up can undo previous efforts. Countersignaling is the easier option because it doesn’t involve an active effort. We are most likely to countersignal when a given trait is obvious to any observer.

When we countersignal, we don’t feel insecure or embarrassed about it because we’re in control.

Conspicuous Consumption

“Invention is the mother of necessity.” ― Thorstein Veblen

Conspicuous consumption is the practice of choosing to purchase goods and services for their capacity to signal wealth and thereby excite respect or envy in others, rather than for their practical value.

Economist and sociologist Thorstein Veblen debuted the concept in his 1899 book The Theory of the Leisure Class. Veblen noticed that the wealthiest people in society were eager to outright waste their money on useless purchases, purely for the status this would signal. Having the capacity to squander time and money was the ultimate signal of wealth during Veblen’s time, following the Industrial Revolution.

The newly created leisure class suddenly had unprecedented wealth and opportunities for demonstrating it. Prior to the Industrial Revolution, conspicuous consumption was purely the domain of the very rich.

Afterward, it was open to almost everyone and became a key part of the way we consume—with the need to signal becoming more important than utility in most of our purchases.

Ford versus Ferrari

Will MMT Collapse the Financial System?

Source: ZeroHedge, Nov 2019

Governments facing soaring demands and limited tax revenues are naturally tempted to meet these demands with “free” new currency, since the political and financial pain caused by skyrocketing taxes leads to governments being tossed from power.

This temptation explains the regular occurrence of hyperinflation and debt default, as the temptation to over-borrow and pile up interest payments leads to governments defaulting on their debt. In both cases — hyperinflation and debt default — there’s a currency/ governance/ financial crisis that upends the status quo.

This is one common objection to MMT: the freedom to issue new currency is difficult to limit, as there will always be more demands for government spending. Without some “governor” to limit the issuance of new currency to align with the expansion of goods and services, then governments tend to issue new currency far in excess of what the real economy is creating.

This generates inflation, which impoverishes everyone using the currency.

MMT advocates claim that since MMT generates goods and services, it won’t generate inflation. But rebuilding a bridge doesn’t actually create any new goods and services, or increase productivity: it generates wages and consumes materials and energy.

Since it doesn’t generate more consumable goods and services, the expansion of wages and demand for materials will drive prices higher.

The core difficulty here is that the democratic political process is intrinsically skewed to short-term, politically expedient dynamics: politicians focus by necessity on winning re-election, and they will naturally approve new issuance of currency and new spending to placate the demands of constituents, lobbyists and campaign donors.

I honestly don’t see any intrinsic limit on political expediency. Politicians need to be forced to say, “I know your need is legitimate, but the money’s simply not there.”

Without some real-world limit on the issuance of new money, money will be issued in surplus because the issuance isn’t an economic process, it’s a political process.

ultimately, “wealth” (as measured in new goods and services generated by capital and labor) is generated by increasing productivity, via investment in greater efficiencies.

Much of the spending people want — repairing bridges, supplanting natural gas electrical generation with solar or wind, and so on — are not necessarily increasing productivity: the repaired bridge carries the same number of vehicles as it did before, so there is no increase in productivity.

In other words, efficiency and productivity are core dynamics, yet the MMT process is fundamentally political, and politics has little interest in efficiency or productivity. It is, as noted above, politically expedient, with a default setting to put off tough decisions into the future.

In the private sector, return on capital and the productivity of labor and processes are the core dynamics. These rationalize decisions to prioritize efficient use of capital, labor and resources. Absent this rationalization, resources can be squandered for politically expedient reasons.

In other words, capital, resources and labor can be mal-invested, which brings up the opportunity cost: all the capital, labor and resources squandered on “bridges to nowhere” and other pork-barrel projects are no longer available for truly productive use.

The key question here is: How do we harness our intrinsically scarce capital, labor and resources to increase productivity and socially/ecologically beneficial investments in a sustainable way?

MMT’s diagnosis is that a lack of currency is the primary problem. The MMT solution assumes the new currency can be efficiently invested within the existing political system without disrupting the increasingly precarious existing financial system.

While the appeal of MMT is self-evident, it seems to me that both the financial and political systems are broken in ways that MMT, no matter how it’s managed, cannot fix.

The problem is we’re misallocating capital, resources and labor on a vast scale. That’s the problem. Adding more currency and capacity/”growth” doesn’t fix this problem, it actually makes it worse.

If we look around at the trillions of dollars in recently issued currency floating around the world looking for a yield, the trillions poured into asset bubbles that only benefit the few at the top, the gargantuan waste of capital, it’s hard not to see MMT as a “green” Band-Aid for a profoundly broken, wasteful, unsustainable system.

MMT leaves the existing status quo essentially untouched and adds a new layer of newly issued currency and spending, and a new layer of “growth” and consumption, consumption that no matter how socially beneficial is still an additional burden on resources.

In effect, MMT is another attempt to preserve a dysfunctional status quo by adding another layer of newly issued currency and “growth.” More “growth,” even the sort envisioned as “Green,” is simply adding to a destructive system.

This is a fatal flaw in MMT. Relying on politicians to impose limits on their own desire to win re-election is to deny human nature.
To sum up: MMT is presented as the solution to the “problem” of insufficient government funding, but that’s not the real problem:

The real problem is the purchasing power of the fiat currency that will be issued in the trillions of dollars.

It’s a recipe for the collapse of money as we know it.

A Plane in the Sky

Source: The Points Guy, Nov 2019

See lower right (just below Cyprus) of the graphic