Blog Name Change

I recently changed the name of my blog from to The change is slight, but recognizes that I’m no longer a one-man operation – I’m now part of a team.

As life changes, so will this blog. And while I’ve sometimes struggled in finding topics about which to write, marriage brings an abundance of noteworthy and varied ideas.

Hopefully, I’ll have a few photos to share from the wedding in a few weeks, but until then, I’ve put together a rough outline of things I intend to write about. Feel free to send any additional suggestions to

  • Marriage and Finances
  • Marriage and Work
  • Marriage and Health
  • Marriage and Family
  • Marriage and Friends
  • Marriage and Personal Hobbies

The Rise and Fall of Nations

I recently finished reading The Rise and Fall of Nations by Ruchir Sharma. Sharma is a former journalist-turned-investor at Morgan Stanley. In his book, he identifies 10 rules on which countries can be rated to determine if their economic growth prospects are good, average or just plain ugly. Here they are as organized by chapter in the book. (Separately, I should note the given examples are United States-centric, but nonetheless apply to all nations.)

  1. People Matter. It feels a bit obvious on its face, but as one of my favorite phrases from my high school geography class reads, “demographics is destiny.” Sharma specifically highlights the working-age population as a necessary driver of economic growth, whether achieved by natural birth rates or immigration. On this indicator, the US approached its apex during the late 2000s at which the working-age population as a percentage of the total population began to decrease rather than continue its upward trend according to the World Bank. While the US remains a relatively young country in comparison to its Western peers in Europe and Japan, its aging population presents new challenges especially around the cost of entitlements.
  2. The Circle of Life. The US election cycle results we now face may seem dismal to many, but the recurring peaceful transition of power from one set of leaders to the next is often taken for granted. While we might expect and even demand action from our leaders today, it often takes a crisis which carries a groundswell of support to get things done. The response by leaders around the globe to the financial crisis of the late 2000s may be disappointing to some, but the structural reforms enacted by leaders, sometimes unelected supervisors of the state, during their short time in office were pivotal in cleaning up public and private balance sheets to ease the return and flow of credit to the real economy. The US now has the top-performing banks in the world as a function of the bailouts that, while highly controversial, were highly effective in getting the economy back on its feet.
  3. Good Billionaires, Bad Billionaires. Surprising as it may be, Sharma recognizes that there is a difference between good billionaires and bad billionaires. Billionaires which are considered “good” derive their wealth from innovation and new industries which ultimately raise the standard of living for the general population. Bill Gates, Mark Zuckerberg and Jeff Bezos would fall into this category. In contrast, billionaires which are considered “bad” derive their wealth from political connections and, as a result, are typically made rich by resource extraction or real estate which requires state approval or state-sanctioned monopolies such as telecommunications. Without naming names, there’s one particular individual that’s been in the news lately which might come to mind as a “bad billionaire” for his ability to manipulate laws and the tax code to meet his needs.
  4. Perils of the State. In some situations such as the general care and protection of the population, the state is best suited to fulfill the role of running a military. However, the state’s meddling in economic activity via state-owned enterprises such as banks and industrial complexes is typically unsuccessful by meeting demand with either too much or too little supply. That is not to say that there are not identified instances of market failure vis-à-vis the tragedy of the commons or other quirky behavioral phenomena where regulation requires interested parties to appropriately internalize external costs, but in general, the state serves best in a limited role from a fiscal perspective.
  5. The Geographic Sweet Spot. Generally as a rule, the world’s metropoles reside near major bodies of water, allowing cheap transportation by boat. While this rule remains true today, the idea of a “geographic sweet spot” proposed by Sharma gives greater focus to how countries make the most of their location, especially in relation to potential trading partners, both rich and poor. Simply, this is David Ricardo’s classical theory of comparative advantage. If the desert nation-state of Dubai can find its niche as the lap of luxury and openness to the Middle East, there’s nothing stopping other countries from becoming the best or one of the best at something in their relative vicinity.
  6. Factories First. Though I found this idea somewhat hard to swallow with my hope that emerging countries will be able to leap ahead of the less savory qualities of the Industrial Revolution such as pollution and hard labor, Sharma’s presented evidence is difficult to refute. Frustratingly, there is no other mechanism known that is so effective in moving large swaths of the population to higher levels of income than manufacturing. Notably, this increased standard of living is done with minimal support by the state. Factory life is a pivotal step in the economic life cycle and few countries can skip ahead without literally getting their hands dirty.
  7. The Price of Onions. Rampant inflation is bad, but any level of deflation is also bad. Why? Money fails to serve its function as a reliable store of value. In the case of inflation, which is far more common among emerging markets, if the basic necessities such as food, clothing and shelter suddenly become too expensive, a hungry, naked and homeless population feels there is little to lose in overthrowing the government which leads to instability in all facets of the marketplace. Importantly, the marketplace cannot succeed without a safeguard of private ownership or an arbiter of contracts. Fortunately, the markers of impending government and market collapse can be seen in the easily observable prices of food and energy. Such is the power of a trip to the grocery store.
  8. Cheap is Good. Study abroad is sometimes abused by students traipsing from one location to the next looking for their next Snapchat or Instagram post. However, one lesson that can’t be avoided is how much these travels cost or, rather, how these travel costs feel to the pocketbook. When a country feels expensive, there’s less ability for foreign capital to be deployed to true capacity-increasing opportunities. The cheap-good/expensive-bad paradigm is typically nearing an inflection point as it spreads to real estate. Putting currency manipulation aside which can lead trading partners to raise tariffs, a “cheap” currency encourages investment and exports from and to foreigners which brings the trade balance away from deficit and toward surplus.
  9. The Kiss of Debt. The punditry class likes to spend time talking about how the United States government will soon be unable to service its continually growing debt. Is this true? Well, it depends. If the United States is able to grow its tax-paying base faster than its debt, it’s fair to expect that we’ll grow out of our debt just like a young family with kids and a mortgage that can still save toward a handy nest egg on which they can rely in retirement. If the United States borrows and spends at a rate faster than the economy grows in perpetuity, issues discussed ad nauseam will crystalize. The Bank of International Settlements maintains a credit-to-GDP gap series covering 43 economies since 1961. While there continues to be healthy debate as to the tipping point to expect slowdown and even paralysis, public and private debt growth can indicate the impending direction of the credit cycle.
  10. The Hype Watch. The media is often criticized for “getting it wrong” as evidenced by the recent US election, but Sharma proves this thesis systematically by reviewing covers of Time magazine. If the weekly was bestowing its limelight on some individual or country for their successes, crisis was soon to follow. The vice versa was also true, with depicted tragedies leading to growth. Simply, true investment opportunities are often found in the quiet backwaters where no one is looking. Depending on how you look at it, the media can be a lagging indicator of excess or a leading indicator of doomsday. In conjunction with supporting evidence discussed supra, it can certainly to pay to be a market contrarian. Ask George Soros.

All in all, I heartily enjoyed Ruchir Sharma’s The Rise and Fall of Nations. Feel free to shoot me an email if you’d like my copy to read.

“Yesterday was a good day.”

I started journaling on a daily basis about a year ago.

My journal entries can run short or long, touching on the special celebrations or unexceptional banalities of life, but they always start with the same sentence – “Yesterday was a good day.”

While it wasn’t something I wrote intentionally at first, each of my entries now starts in this manner. By forcing myself to start with this one sentence, I must immediately consider and discuss that which is good in my life. And there’s certainly plenty of good.

If journaling isn’t part of your daily practice, I might recommend trying it out. Even if it’s just writing this one sentence, you might be surprised where it leads.

Cash is King?

Yesterday in the Wall Street Journal, Harvard economist Kenneth Rogoff wrote about “The Sinister Side of Cash” and what it would be like to do without large denomination bills including the $100, $50 and $20 bills as well as their foreign equivalents. Illicit activities such as trafficking or tax evasion would be more challenging while the preservation of smaller bills would still allow for some degree of anonymity in transactions. Additionally, monetary policy could be more effectively implemented in passing through negative interests across the economy, including depositors, thereby eliminating the zero lower bound.

While Dr. Rogoff lightly references alternative substitutes for storing and transferring values such as diamonds and gold, the rise of cryptocurrencies specifically warrants greater attention unless further regulation is effectuated to limit their expansion. As a regular follower of news surrounding P2P payments and cryptocurrencies, I am confident that private digital currencies will be in vogue by 2030, if not earlier, as the political landscape becomes more fraught across the globe and as monetary policy is led to explore new tools in its pursuit of inflation targets and maximum employment with unknown second-order consequences.

In listening to a recent series on oil by NPR’s Planet Money, I am reminded of the power of human ingenuity in the pursuit of progress and/or self interest — we could live in a world without oil just as we could live in a world without dollar bills, despite some immediate challenges. But until such a world exists, cash is still king.

Thinking Time

There was a recent profile of President Obama by the New York Times on his evenings at the White House, generally spent in solitude and mixed with both work and relaxation. Although not necessarily applicable throughout his presidency, President Obama has been able to carve out pockets of “thinking time” despite holding a job and serving a people who offer limitless distraction. Some of the world’s most productive individuals and organizations attribute this “thinking time” to their success.

I try to do that in my mornings. Getting up early is not always easy nor invited, but having the time to hear and organize my own thoughts for the days, weeks and months ahead is calming and productive. It’s a worthwhile investment of a resource for which is equally limited and distributed. I highly recommend it.