A Tale of two Cities

This post is designed to be an investment idea. The plan is to try and leverage the next major climatic change in currencies. It will continually evolve as I add new ideas, insights and posts from my readers and colleagues.

A Tale of Two Cities. A metaphor.

London and New York City, two cities, two dysfunctional governments.

(as well as New York’s suburb, Washington)

November 14th update, click here


I have two somewhat favorite authors, Nassim Taleb and Peter Drucker. Ironically, or perhaps not ironically, Drucker’s best book. “Adventures of a Bystander,” is not only his least well known, it’s rarely if ever mentioned. My favorite book by Taleb is “Fooled by Randomness,” a book designed to jolt your paradigm.

Talib is, of course, a mathematician/statistician/philosopher. Drucker was a professor, but both started their careers in the fuzzy world of stock trading. More importantly though, both fashioned themselves as bystanders.

Anyone who sees themselves as a bystander can easily see that a tale of two cities, New York and London, is a tale of two governments that have no legislative function.

To watch the absurd impeachment of the US President is like watching The UK’s Brexit in drag. Neither government is trying to do anything substantive. Since the Democrats are in free fall, attacking the president fills their campaign coffers. With 20 Presidential candidates, all raising money, they’re in the process of stripping their party of cash BEFORE the election.

Brexit is the same. The British parliament seems oblivious to the fact that they’re supposed to be running the country. They continually bicker, “intelligently,” trying to win arguments that have no foundation in any ACTION they might take.

In the US, congress seems to be oblivious to WHY they’re impeaching the President just as the Brits seem oblivious to what Brexit means.

I’ve spent a lot of time, (too much, perhaps) studying Brexit. It’s a mixture of over-rationalizing, arrogance, racism and misreading history.

I typically don’t use or even say the word racism, but with Brexit, the UK really is saying the country would be better off with more English people. I don’t know anyone outside England who thinks Brits are hardworking. Their arrogance is stunning, considered their standard of living trails Germany and Ireland by large margins.

In the US, summing up Washington’s ideas to fix America’s problems is like saying we could have saved the Titanic with proper positioning of the deck chairs.

This tale of two cities obscures the world as it is.

What’s evolving and emerging in the world, below the façade of corporate cartel control, I have broken into three parts.

1) The evolution of non-bullshit

2) Brain drain, both in the head and between the legs.

3) The end of the two cities

1) The evolution of non-bullshit


The byproduct of free trade, as and one can see, is a concentration of money.


The city though, that has been the biggest recipient of this in America is not London or New York, though it seems so. It’s Boston.

There is no city on earth as powerful as Boston. Just as it’s universities and colleges, almost 50, draw in massive amounts of investment money, they draw in the world’s most advanced studies. Keep in mind, Universities are charities. Money doesn’t flow from them it flows to them.

And it’s not the colleges advancing these studies, it’s billionaires. The world’s recipients of free trade billions are literally THROWING money at anyone with the next big idea. The universities are simply a tax-deductible conduit.

In fact, some of the best ideas are so flooded with money, they won’t go to investor meetings.

Everyone sees tech as the new frontier. Tech represents a small fraction and is largely funded by advertisers who mistakenly think big data is their savior. Perhaps, but the advances made in farming, carbon capture, metals, medicine and engineering dwarf tech many times over.

2) Brain drain, both in the head and between the legs.

If one travels to Boston and any major German city, one can see this. You could argue that Boston isn’t even an American city. It’s filled with non-Americans, Brainiac’s that are funded by rich parents, governments and universities from every quarter of the world.

You can sit in the Starbucks in Harvard Square and hear a dozen languages on any given day.  As much as we like to think of these kids as elitist or supremacist, they’re neither. They’re insanely aggressive, confident and work their asses off.

And for every Brainiac in Boston, there’s a prostitute in Frankfurt or any city like it.

This is the tale of two cities and has been since the dawn of time. Free trade concentrates money in cities and wherever you find money, you’ll find hookers.

The opening of Europe, after years of communist/capitalist division, has send brains and vaginas scurrying to the money centers. Just as Boston’s Brainiac’s are smart, Europe’s prostitutes are beautiful and talented.

3) The end of two cities.

In the end, the two cities will die.

In fact, many would argue they’re already dead, they just haven’t been buried.

London’s mayor is a clueless, virtue signaling quasi-cleric. Like the witless mayor of New York, he came to power promising poetic platitudes that are so at odd with running a city that they would be better to use the oracles at Delphi.


Watching Brexit is like watching the Dickens classic “Little Dorrit” in real time. Little Dorrit is a story about an overly bureaucratic London courts system that bankrupts an estate while attempting to settle it. (Amazingly, the BBC series Little Dorrit is advertised as a story of enduring love!)

Churchill once said the “democracy is the worse form of government, except all the others.”  I can picture Churchill’s tongue plastered so hard against his cheek, his face contorted. Of course, Churchill was probably the world’s most accomplished bullshitter. He became a hero ruining his country. So much for great rhetoric.

The only real accomplishment of these self-proclaimed democracies is that they’re so bureaucratic and corrupt, they can’t get anything done. But therein lies the problem.

The two cities are going to die.

And the death will be long, painful and ugly.

Cities that were once great like Lisbon and Amsterdam, but especially Venice are, today, tourist attractions. Mr. New York, Donald Trump’s announcement that he’s leaving New York, (and Andrew Cuomo’s comment, good riddance) are endemic of what has become a flood of wealth away from the city.

Wealth is leaving New York and London faster than you’d leave a burning hay loft.

New York’s superstar politicians (tongue in cheek) Schumer, Cuomo and Gillibrand have become tin cup beggars trying to bring business to New York, but it’s a losing battle.

The package offered to Amazon to relocate to New York is just one of hundreds of “deals” New York is offering to businesses. New York’s government (tin cup beggars) had to go against a socialist “other government” that called the offer a “cost”. They said taxpayers would be paying Amazon, seemingly oblivious of the fact that having Amazon and not having Amazon was the same “price” less 20,000 high paying jobs.

London’s situation, one might argue, is worse.

Overrun with immigrants, crime has exploded. England’s absurd social welfare systems, especially it’s free health care, has become a national disaster. Whereas America has an expensive system, England has no system. Immigrants who have no intention of either working or assimilating are flooding the system.

The historical significance of a tale of two cities can’t be overstated.

Rome went from having more than 1.5 million residents (Some estimates are as much as 3 million) to less than 100,000 in 200 years. Venice was similar though not as bad.

The city that best typified this drain was Constantinople.

The tale of two cities was once a tale of one.


Constantinople was formed by the emperor Constantine, who moved “Rome”, much of its population as well as it’s government to the Bosporus, to a peninsula he believed (rightly) that was more defensible. In other words, he moved their Brainiac’s as well as the hookers.

This move sucked the wind, as well as the money, out of Rome and to an area that was, at it’s time, the world’s greatest power center. Constantinople had several major advantages which I’ll list not in order of importance.

1) Constantinople was built on a peninsula protected on two sides by water and the other by a wall.

2) They could control trade, especially “silk road” trade through the Bosporus. This gave them control of Chinese steel, as well as silk, the most sought-after product in the empire.

3) It gave them control of Crimean grains as well as olive oil and wine from Italy’s east cost and the Greek Islands.

4) It gave them control of Greek institutions of higher learning.

5) It gave the Emperor a monopoly on religions which he used to incorporate the classic Greek, Roman and Jewish mythologies and rules into the new creed, Christianity, the religion that revolutionized the world.

But this monopoly had a price. It sucked the wind out of the “Empire.” It emptied entire nations of talent as well as turning the focus of the world away from the west. “Emerging” nations like England and France became backwaters, scholarship collapsed and with the collapse of Constantinople the world entered into a time known as the dark ages.

The tale of two cities teaches us that wealth doesn’t die, it moves.

Bureaucratic institutions that fashion themselves as the builders of wealth are stripped of their power an exposed as frauds. Universities, beneficiaries of rivers of unearned wealth become hollow ghosts of what they once were.

History tells us little about the collapse of these trading empires, largely because historians don’t believe trade matters.

Locked in their mindset that the history of nations is political, they may have read Little Dorrit, but it was probably a story of eternal love, much like the movie Cleopatra. In Cleopatra, the beauty of Elizabeth Taylor blinded us from the genius of Octavian, who destroyed Marc Antony, giving Rome prime access to free trade through the sink road. 

And just as Little Dorrit is a story of eternal love, blinding us from understanding just how screwed up England’s government was, the current row with China is blinding us from the real history of that country. 

China’s control on trade today is nowhere near as powerful as when they monopolized the manufacture of tempered steel and silk. No country could replicate the millions of coolies that labored from dawn to dusk pulling strands of silk from silkworms, a process that took hundreds of years to perfect. Chinese tempered steel could not be manufactured anywhere else.

What does China manufacture today that couldn’t be moved in a matter of months. Their only advantage is the mining of rare earth elements which is an oxymoron. Rare earth elements are not rare at all. They’re just environmentally hazardous.

So, where will the money go when the Tale of Two Cities is rewritten?

To answer that question, we need to ask new questions?

Which county is the safest?

Which country would you want to live in?

Which has the hardest working people and the strongest culture?

Is what we’re looking for a country, or is it a region?

We’ll tackle these questions as our Tale of Two Cities evolves.

November 14th update






I like Boris Johnson, but what the ****

I mean, I like Boris Johnson, but it’s not a bromance.


He’s a smart guy and like most British politicians, he’s a class A bullshitter. (I say this with respect to the craft.


But this article in the “The Telegraph” is flat out looney.


I know a lot of Europeans and I haven’t met a single one that “believes in Britain.” In fact, the statement is absurd. The idea that they are going to rekindle the Empire, is so weird, it’s hard to encapsulate the weirdness in a blog post!


It’s clear that the UK yearns for the old days of Empire, but their memory of Empire isn’t what Empire was. The British Empire was a trading regime based on using their navy to control governments, the Pound Sterling to monopolize trade and fleece the countries blind. It was called mercantilism, which is fancy term for gunboat diplomacy. It was a form of legal theft from the weak.


Some of England more interesting acts of Empire, which Johnson doesn’t seem to remember were England’s blockade of New York’s harbor during WW1 and the confiscation of German assets, the post WW1 blockade of Germany which led to the deaths of 850,000 German civilians or their naval incursions into Macao and Hong Kong.


I’m sure China will be thrilled to go back to the silver for opium trade.


This is not a criticism. It’s how merchant economics worked in the 19th  and early 20th century, but the idea that the UK is going back to that is absurd.


The first damage has already been done as Tesla has just announced that its new electric car factory is being built outside Berlin. For the UK, this is like a drop kick in the nuts. Not only is Germany WAY behind the curve in electric car technology, but the UK is way ahead. Why would Elon Musk build his new Gigafactory in a country that has to negotiate trade deals with 100 countries. He can simply pick one that ALREADY HAS TRADE DEALS.


But that isn’t Johnson’s weirdest quote.


“Global Britain meant rekindling old friendships in the commonwealth, 52 of the fastest growing economies in the world.”


Leaving aside the idea that their relationship with India was hardly an “old friendship,” does Johnson really believe that India is going back to the pre-Gandhi era where England forbid cotton exports? Are they going to negotiate a trade deal with the Canada that cuts Canadian exports to the USA?


In Johnson’s world, Italy could declare itself the old Roman empire and “rekindle old friendships” by getting tribute payments from Egypt and occupying Crimea.


The EU was created as a trading block to offset the power of China and the USA. The UK was allowed in even though it never had to convert to the Euro.


The problem is, the English are not competitive and even though their GDP is growing, their GDP per-capita, their wealth creation in the middle class and their entrepreneurial system is in tatters. The UK is just a few years from being behind the Czech Republic in per-capita GDP, a country that was communist less than 40 years ago.


Explain to me how leaving the EU helps. Explain how England “rekindles” Empire.


Geeks note: Although there are 100 ways to measure economic might, what makes per-capita GDP important, (though only for economically diverse countries) is that it’s really a measure of the worth of a country’s assets and the strength of its culture. The highest per-capita GDP among modern countries is Luxembourg. To graduate from high school in Luxembourg, a child has to be fluent in three languages, none of which are English.








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