Passing through the anus of the services economy

Domainfax traffic yesterday was dominated by an huge story about Melbourne coffee:

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The manager of a Melbourne cafe at the centre of a social-media storm in a coffee cup says its controversial “deconstructed” brew is aimed at the city’s notorious coffee snobs, not hipsters.

Writer Jamila Rizvi shared a photo on Facebook of an unusual coffee she was served at the Abbotsford cafe, which came to the table in three separate beakers on a wooden paddle.

“Sorry Melbourne but no. No no no no no,” Rizvi wrote on Tuesday.

“I wanted a coffee. Not a science experiment.”

Within 48 hours Rizvi’s post had received more than 21,000 likes and been viewed more than 2 million times.

Lisa Wearmouth, who manages the cafe within South African furniture store Weylandts that served Rizvi’s coffee, rejected claims the deconstructed coffee was a sign “hipsterism” had gone too far.

Ms Wearmouth said the coffee Rizvi ordered was actually a deconstructed long macchiato, not a flat white.

It would be very easy to poke fun at the Seinfeldian seriousness of this trivial discourse. The people involved in the story are ludicrously earnest while engaged in the most asinine of pursuits. We could dismiss this generation of caffeinated navel gazers with a flick of the pen, feel superior for a bit, and be done with it.

But I’m not going to do that. On the contrary. I’m going to take this discussion far deeper than these trifling millennials would think possible.

I first read this story yesterday as I awaited a back massage at my local shops (in Melbourne’s inner west). The massage is a vital part of my weekly routine lest my back petrify into a block of stone owing to sitting here palavaring with you all day.

It struck me as I sat there that it was wonderfully convenient to have a Thai massage joint just around the corner, especially given my local shops are not very large. I briefly surveyed the other shops and realised swiftly that what I was looking at was the lion’s share of the Australian services economy supply chain. Nearly all of it was directed not at the production of anything, nor the supply of anything, nor the inputs to some factory, but at servicing my person. Specifically, it was mostly targeted at various components of my body. There was an inordinately expensive organic grocer for my stomach. A retro barber for my head. A manicurist for my nails. A tatooist for my ink. A specialist wine purveyor for my tongue. A gift store for my birthday. A shop front personal trainer for my flab. An Asian tailor and presser for my clothes. Any number of cafes of course. And a real estate agent on every corner.

I realised that it was I that was the factory. My body, or more to the point, my mind, my intellectual property, was being supported my an extensive supply chain of services that plumped, fattened, thinned, preened, pressed, fluffed, trimmed and massaged me into the ongoing production of ideas.

There was one thing more that was obvious. These various services were not just the slapdash Aussies of yesteryear. There were no lackadaisical loafers working for the man and hanging for a smoko. Each of the services on display was a finely crafted specialist, an artisan in his and her craft, immensely serious with extraordinary attention to detail. The massage offered a limitless array of options right down to your chosen incense and its specific impact upon your chakras. The barber wore a perfect replica suit from the 1920s and sported enormous mustaches to match. The personal trainer rippled in the window. The grocer glowed with ruddy peasant health and one could almost smell the fresh loam on her fingers. The cafe’s were a rival for Tate Modern in their timberwork and ceramics, and one could literally choose a vintage decolletage in which to hang as if riding in a time machine.

The amount of effort and innovation going into finding a competitive edge for the privilege of servicing my sagging flesh was spectacular.

Which brings us back to our “deconstructed” coffee. That cafe owner should not be criticised. She is the apotheosis of her milieu, an economic figment generated straight out of the forces of production that our betters have unleashed upon us. She is the services economy in all of its pathetically misplaced glory. Even the Domainfax fascination with the deconstructed coffee is more whirring widgets for GDP!

And that’s the thing. All of these local shops are a hive entrepreneurial beavering. But all of them are directed inwards in an endlessly dividing paradox of insignificance. None of them is tradable, as services mostly are not, so none has the chance to flower much beyond the local shops, let alone nationally or internationally. That poses a problem for the economy because if all you ever do is service one another in more elaborately infinitesimal detail then there is no actual wealth generation going on. There was no organic capital generation, no capital deepening nor breakthrough’s in efficiency. The capital that drives this machine by definition comes from outside of it in the form of a visitor, a new buyer of a local asset or someone that has borrowed to invest.

That farcical coffee is a microcosm of Australia’s entire troubled economy. All superstructure and, increasingly, no base.

David Llewellyn-Smith
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Comments

  1. C.M.BurnsMEMBER

    one of your very best HnH.

    In all earnestness, please shop this around and try and get it published in a few weekend papers (even the online editions) as this is a perfect read for a Saturday morning narcissist. It may just cause a few (of the albeit many) to pull their heads from their arses for a few moments.

    • fewlishMEMBER

      Yep nailed it – yarraville coffees – less froth, more insight!

      Look forward to reading this again in the majors – perhaps the monthly might pick it up?

    • Tedblack44MEMBER

      With growing inequality the talented and aspirational have an opportunity to create a “Service” and help empty the wallet of the more successful professionals or new elite. Wealth redistribution – but where is the money coming from? Unfortunately a good deal is borrowed overseas by our banks and leant to households for bigger more expensive houses and “Investment Properties”. Spending based on the wealth effect.

  2. Wow, deconstructed coffee, sounds like smashed Avocado to me! But H&H what you describe above has been developing for a very long time in Oz & most of Western World (+50 years?). Its just becoming more obvious. Narcissistic characters are growing up everywhere, its all that is required to be part of the hipster/modern/productive(?) app crowd. Add on a property & some financial spiviness & voila you’re a billionaire. Why produce anything tradeable when you can have latte?

    • Narcissistic characters are growing up everywhere, its all that is required to be part of the hipster/modern/productive(?) app crowd

      did we offer anything better to our kids? who turned them into these Narcissistic charactershipster/modern/productive(?) app crowd?

      • From youth to geriatric…. narcissism wanes… might be why the youth are always the biggest targets from advertisers to ideologues…

        Journal of Developmental & Behavioral Pediatrics:
        June 2001 – Volume 22 – Issue 3 – pp 185-187

        Children and TV Advertising: Nowhere to Run, Nowhere to Hide

        http://journals.lww.com/jrnldbp/Citation/2001/06000/Children_and_TV_Advertising__Nowhere_to_Run,.6.aspx

        Disheveled Marsupial… sadly… soon… information will be classified…

      • From youth to geriatric…. narcissism wanes

        You’re the exception, skip 😉

      • R2M…

        I give you credit for wrapping your head around AGW, but not, historical or sociological – sociopolitical reality…

        Disheveled Marsupial…. stick with what you know… or are you still confused about environmental economics being neoclassical… still…

      • narcissism is man/woman in its natural state and a way thru which to fend off fears of insignificance/dying etc.

        to push thru requires some difficult confrontation with one’s own limitations which is a cup of coffee not commonly served as our neuro environment makes its less painful to live in a cloud of happy delusion. This also makes one live longer an happier. Do narcissists have it better? Potentially.

        When we stopped innovating in the branches of philosophy, psychology, the basics of healthy societal interaction we abnegated our responsibility for a healthy superorganism.

        What’s for sure is that your fondue set tells me that man will always find ways to express its condition. That there are 500 hours of porn up and downloaded across the world every minute tells us that we really have reached the cross roads; that money is people’s natural way of self expression or self worth; that we have no history or identity to pass down to our children; no legacy because we can’t be proud of our achievements – of what we excel at.

        That our world cup winning science team that invented Wifi, that punches above its weight has had its blue ribbon global warming team cut to the hilt when other countries around the world are spending more money to excel in that field tells us one thing. We are a bunch of people run by losers. We need to develop role models. We have them in spades. We just aren’t looking.

      • In my experience, the increase in narcissistic tendencies often seems to be inversely correlated to spiritual pursuits. I believe that the dissociation and isolation from the natural environment and from a spiritual environment (I don’t mean going to church), feeds these inward looking tendencies. Getting back to nature & finding a spiritual connection fills the unknown void in a way that self obsessed consumption attempts to but ultimately fails at doing.

  3. Well done. You are the first author to have managed to successfully describe the core foundations of Malcom’s New Economy that we are transitioning to. I didn’t think it could be done.

  4. sydboy007MEMBER

    sigh.

    is this…is this really what 200 odd years of struggle, triumph, struggle, boom crash struggle boom…had lead us to?

    just moved to a new office for work. first time i’ve had natural light for many many years. we have a swiss call franke who makes us coffee. touch screen bliss. flat whites, cappuccinos, macchiato, short blacks or double blacks (yes he’s a whitey rachist oh and misogynistic too for having a male binary gendered name), even a hot choc and chai tea.

    me thinks this automaton of a person is the hardest worker in the office.

  5. Yes, but could this also be a sign of the times for a fully modernized global economy, not just Australia’s?

    Once you’ve automated the factories that churn out cars, clothes, mobile phones, flat screen TVs, and tablets; how else can your average person produce ‘value’ other than through highly refined personal services? As SB007 pointed, the process of making a normal flat white has now been automated (though I still don’t think as well as a cafe). This leaves the human-run cafes to come up with new ways of making coffee that come into and go out of fashion faster than the process can be automated (i.e., the chemistry experiment that everyone is talking about). Even medical diagnostics can be automated once a human has placed the right kind of sensors in the right kind of places, perhaps coupled with a complete analysis of your genome done by automated PCR and interpreted with bioinformatic algorithms. We already have robots driving the combines harvesting our food and moving our mineral resources around. Maybe the 1920s barber you saw was an investment banker who was recently made redundant by a computer algorithm buying passive index funds?

    To me HnH, you could be witnessing what a future economy equipped with nearly unlimited power and automation would look like. I agree that in Australia’s case its probably because they’ve outsourced all other means of production in exchange for exporting food, dirt, diplomas, and property titles; but maybe there is more truth to be found here.

    • In this case it is a sign of surplus wealth. People with time and money but no imagination think about elaborate coffee. It’s like the Japanese tea ceremony. Pointless, but a symbol of idle excess.

      A couple of blocks from where I work in Sydney the local caffeine dealers offers a $1 super strong standing espresso. Cheap, fast, no frills. The people who buy that have a real mission – even if it’s just to get the work done so they can go home to play with the kids.

      • The people who buy that have a real mission – even if it’s just to get the work done so they can go home to play with the kids.

        We all know it’s almost never that. The mission usually to work more to make more to pay for things none has time to do …

      • The mission usually to work more to make more to pay for things none has time to do …

        Or to make payments on the massive mortgage.

      • Matthew,

        A lifestyle maintained with a stready stream of real and financial asset sales to foreigners is not a sign of wealth.

        More like decadence, dissolution and decay.

      • Sadly, all the replies above are correct.

        In response to pfh007’s closing sentence, yeah, I think opulence and decay are sides of the same coin.

      • Matthew wrote:
        In this case it is a sign of surplus wealth. People with time and money but no imagination think about elaborate coffee. It’s like the Japanese tea ceremony. Pointless, but a symbol of idle excess.

        To me this is a terrible outlook on life.
        In my view this ventures deeply into fast food meme and dis-individualism.
        the point of tea/coffee (made and had in historically traditional ways – the traditions that extends past the new world culture) is for your mental health rather then a tick on your dietary entry.
        Otherwise everything becomes soylent green.

    • a future economy equipped with nearly unlimited power and automation would look like

      It’s a cornucopian wet dream that has zero chance of happening.
      http://www.resilience.org/stories/2016-06-02/our-renewable-future-introduction

      Fossil fuels are on their way out one way or another, and nuclear energy is a dead end. That leaves renewable energy sources, such as solar, wind, hydro, geothermal, and biomass, to shoulder the burden of powering future society. While it is probably an oversimplification to say that people in the not-too-distant-future will inhabit a 100 percent renewably powered world, it is worth exploring what a complete, or nearly complete, shift in our energy systems would actually mean. Because energy is implicit not only in everything we do but also in the built environment around us (which requires energy for its construction, maintenance, and disposal/decommissioning), it is in effect the wellspring of our existence. As the world embarks on a transformative change in its energy sources, the eventual impacts may include a profound alteration of people’s personal and collective habits and expectations, as well as a transformation of the structures and infrastructure around us. Our lives, communities, and economies changed radically with the transition from wood and muscle power to fossil fuels, and so it is logical that a transition from fossil fuels to renewables—that is, a fundamental change in the quantity and quality of energy available to power human civilization—will also entail a major shift in how we live.

    • Switters….

      Might we be watching the final push to make everyone [I] a commodity…. where the market decides your worth or value as a human… relative to others…

      • ErmingtonPlumbingMEMBER

        ” relative to others…”

        What would be the point of of Ostentatious consumption and displays of wealth, if it were not ” relative to others…”

      • EP….

        My allegory has more to do with the frame work which is used to determinate worth to the market e.g. the simple rules of neoliberalism…

        1. because markets…

        2. go die…

        Disheveled Marsupial… do you really think the elites care what the unwashed think of their stuff or that all their stuff is intrinsic to how they feel about themselves… its just endless acquisition for the sake of it….

    • Jumping jack flash

      “Once you’ve automated the factories that churn out cars, clothes, mobile phones, flat screen TVs, and tablets;… ”

      Hm.. nope. Your scenario doesn’t apply to us, sorry. Instead of automating, which would potentially make us more competitive and productive, we choose to give up entirely. Shipped the factories overseas because we assumed a services economy was good enough, or possibly better than, you know, actually working and producing stuff.

      If we had KEPT the factories and automated them, then yes, you’re absolutely correct. What else is there to do? Well… apart from maintenance and further innovation in factory automation technologies, artificial intelligence, energy, etc, etc.

      We are like my petulant children who refuse to eat their dinner, and then complain they are hungry right before going to bed.

  6. GunnamattaMEMBER

    the economy is me

    Yes, the economy is me
    My every whim drives it higher, longer further, stronger, more beautiful, more complex – so much more piquant, so eclectic, so resonant, so essentially!….
    My ears feel warm and fuzzy as I think about it some
    We must be all that we can be, to nudge along demand
    There must be a service unprovided – could someone wipe my…..
    Or perhaps a happy ending for this throbber in my hand?

    Simple is just a phase for an unencumbered peon
    Adagio un poco mosso if we must, but the 4-4 beat should be in neon!
    Dumb is undemanding – coarse and unrefined
    Our culture woes the contribution all forgone
    In an experiential age the sine qua non is ‘wine and dine!’
    Where unpretentious all too often just fig leaf’s the cheapskate’s con

    There is nothing you’ll ever do or be, to match your well branded robes
    To add opinion and overbearing, as I nibble on your lobes
    Harder, Harder! Says the coxswain from a’back the stroking boat
    Perfection is the languid raison d’être for the day
    But the mincing Manchu courtier run out of things of which to gloat
    And then leads the well bandaged footsies of a nation in decay

    So we are we, because we are we, and we are we, because
    Should you need a pee then look at me and remind yourself this is Oz!
    There is no blame, we live post shame, waves of relief we will soon know
    To lever long’s an indicia of schlong, some application bullshit, acumen
    There’s fresh air spray or bowl, or house or hole, the moistened finger fresh from nose
    But a taper at one end or another, or vinegar stroke, is how the story ends

    Gunnamatta, Mid election campaign 2016

  7. This is what 24 years of uninterrupted growth get you. Economies have (and need) recessions for a reason. They clear the dead weeds and rejuvenate the system. Nature has a built in mechanism for self renewal. In Australia, we’ve managed to configure things so that no self renewal is needed (or even allowed). Result: deconstructed coffee is as innovative as we can get..

    • that’s what capitalist economy needs not an economy
      and those recessions are only used to transfer large chunks of previously generated wealth from middle class to the rich class.

  8. brettnicholsonMEMBER

    This all says AUD is going to touch 39c in this cycle and probably trade in a 40/55 range for a decade from 2017 to 2027
    Give me one argument for a higher AUD. Someone said if trump gets in the USD will be sold off but don’t believe that.

    • The one and only argument:
      The amount of foreign funding that will be required to run Australia as a going concern + the attendant interest rates required to keep the inflow goojg might yet add a boost to the A$? Who’s going to put funds there if they think the A$ is only going down?

      • If it does (and consensus is on that for sure) then what good will a lower A$ be to the barber, the masseuse, the bottle shop owner etc? None. But it will cost them twice as much to fill up their car and import their essential oils. There will be no net advantage to Australian business from a lower A$ now that the intended beneficiaries have become extinct. A lower currency will do two things (1) confirm the status of Australia as a poor country – something that was totally avoidable as recently as a 5 years ago, and (2) reinforce the downward spiral of those domestic business that are left as they are primarily importers.
        Everyone is calling for a lower currency, but to what end?

      • Agreed. If you want those Americn iPhones made in China or a new Toyota Hilux, then you’re going have to bring something to the global market in exchange. Of course, you could always sell off more of your assets to keep the AUD afloat and maintain your negative current account.

      • Your point is correct Janet, but I will say that you’d be surprise by just what production capacity we could muster given the right circumstances – certainly nothing like what would be needed to offset the massive impact of a low currency but heartening nonetheless.
        We would recover in time and be we would be much better for it too.
        Our issue is not a lack of ideas, it’s more a lack of will compounded by a lack of capital and a hostile business environment for those who want to make stuff, all courtesy of our government and their pursuit of the bankers’ agenda for the past 30 years.

      • But it will cost them twice as much to fill up their car and import their essential oils.

        Petrol and diesel consumption can’t be avoided (but could possibly be reduced in some cases) but surely a large reduction in the importation of useless consumption items is exactly what the country needs?

      • Housing and food used to be cheap in Oz, and imported stuff expensive. This was as little as 20 years ago. Australia has great potential and can adapt and can easily produce enough real wealth to pay for what we import. It’s going to be the adjustment as we’re forced to tighten our belts for a while, and let the unproductive ticket clipping sectors die off, which will hurt.

      • The amount of foreign funding that will be required to run Australia as a going concern + the attendant interest rates required to keep the inflow going
        In control system theory we call this a second order clossed loop control system. To understand the expected response of such systems we need to have precise information on the Natural Frequency and the Damping Ratio.
        https://en.wikibooks.org/wiki/Control_Systems/Examples/Second_Order_Systems
        So does anyone have any idea how we translate these control system parameters into Reserve Bank language / action?….thought not because neither do they.
        Interesting times await us!

      • Can you imagine the flood of foreign investors into our RE sector if the dollar hits that sort of lows?!!!

      • Janet…

        Randy Wray: “Debt-Free Money” – A Non Sequitur in Search of a Policy
        Posted on July 2, 2014 by Yves Smith

        Yves here. I must confess that I am at a loss to understand the deep emotional reactions some readers have to MMT. It’s like raging at a thermometer because it shows you your body temperature. Virtually all of the complaints about MMT are based on a failure to understand what it says about how money works. MMT is descriptive of our current system, and it also has a message that progressives (the real kind, not the Democratic fauxgressive kind) ought to welcome, that the Federal government as a sovereign does not need to run a balance budget, and that a balanced budget is in fact destructive when the economy is as slack as it is now. That means the government not only can but should spend more, which is in contrast to all those barmy arguments about how we can’t spend to [fill in your priorities, have national health care, improve our infrastructure, feed low income kids in school, etc.]. If you don’t like the Federal government directing that much spending, there’s a remedy for that too: revenue sharing, which was instituted under that great liberal Richard Nixon, who though the Federal government raised revenues more efficiently than state and local governments, but state and local government were better at setting spending priorities.

        MMT provides a basis for rejecting neoliberalism and austerity, and people who ought to embrace it are instead being told falsehoods about it and are becoming skeptical. That assures that the current crop of looters can continue their work unperturbed.

        However, MMT does require that you turn the conventional stories about money inside-out. It takes some mental rewiring to understand it, and that degree of reorientation seems to be a big reason for the heated reactions.

        http://www.nakedcapitalism.com/2014/07/debt-free-money-non-sequitur.html

        Disheveled Marsupial… some seem to embrace self flagellation… must be a moral thingy…

      • Right there you have a wonderful expose by Wray on the inanity of MMT!!! Mindless repetition of the same mathematically impossible BS!
        Skippy I don’t know if you have any brains but you really need to start to think instead of mindless quoting stupid BS.

      • Flawse….

        Do you consider that a retort – !!!!!!!! – and you and camp wonder why others classify your “opinions” as theoclassical….

        Do attempt to address any information in the post and back it up by all means…. your knee jerk head pop does not count, in fact it lowers my opinion of you.

        Dishevled Marsupail…. If you – say – so flawse…

      • Something a bit more adroit maybe flawse….

        “We have debt-based money. If you pay me with an IOU, and I use that IOU to pay someone else, that debt becomes a “money thing.” We’re most familiar with debt-based money as bank accounts. Yes, our checking and savings accounts are our asset, but they’re the banks’ liabilities–and that’s how they record them on their books. We assign the banks’ debt to the payee when we write a check.

        The national “debt” has a non-interest-bearing component we call “dollars,” and another that does bear interest (T-Bills / Bonds), just as banks have checking and savings accounts. The difference between those personal IOUs and government IOUs is that the latter are far more widely accepted.

        Notice: The “debt” *is* the money. Reduce the “debt” and it sucks money out of circulation. Doing this historically causes enormous pain to debtors. Creditors seldom say “OK, we’ll reduce your mortgage payment since fewer dollars are in circulation.” See Randall Wray’s piece for more. Among other things, Wray notes that significant National Debt paydowns like the Clinton Surplus *always* precede Great Depression-sized holes in the economy.

        Paying interest on those T-Bill/Bond/Savings accounts is *never* a problem. We make the frickin’ money! There is literally no limit to how much we can make.

        If you doubt that, ask yourself where all the “fiscal responsibility” was when the topic of conversation was Middle East wars, or multi-trillion-dollar bank bailouts (the Fed’s own audit says it pushed $16 – $29 trillion out the door in 2007-8). Somehow this “we’re outa money!” sentiment only arises when the conversation turns to social safety nets.

        To answer the inevitable objection “B…but if you just print money you’ll cause [gasp!][hyper-]inflation!”…

        Let’s admit there’s a theoretical possibility that government, with its unlimited dollars, could get into a bidding war with the private sector and raise prices–hence, inflation. But notice that bidding has to actually occur for inflation to happen. If Treasury minted a few trillion-dollar coins and deposited them at the Fed, that isn’t bidding (paying off debts is un-spending), so no inflation would result.

        Similarly, if government were to be the employer of last resort, employing the unemployed, no bidding would occur. No one is bidding for the labor of the unemployed by definition. So no inflation there, either.

        …and since taxes do not provision government, no tax rise would be necessary, either.

        The “fiscal responsibility” fad began with Democrats … Edmund Muskie, among others, discarded the legacy of the New Deal, like Carter, Clinton and Obama. In treating currency for the currency creator like it was in the hands of a currency user (households), they have sold us down the river. Heck, this misunderstanding is what is at the root of Dilma’s impeachment in Brazil.” – H/T AE

        Disheveled Marsupial…. what flawse… do you hate people and only wish to hold on to your – beliefs – out of stubbornness…

      • Skippy,

        Those articles are excellent.

        They really demonstrate quite clearly how MMT does a great job of giving public fiat a bad name with its hotch potch of partial truths and missing info.

        Yes – fiat is little more than money as law and implicit in that is money as trust or as credit.

        But MMT fails to distinguish between credit of the state and the credit of private individuals.

        It also fails to explain why the credit created by one specific group should be treated as if issued by the state.

        It then ignores the immense practical problems (well demonstrated time and time again) of controlling profit driven private parties who have been allowed to create credit that is treated as equivalent to credit issued by the state.

        It completely ignores the very real alternative of having public money issued by the state and let bankers IOUs stand or fall on the same basis as any other IOU issued by a private party.

        The asinine comment that the state can simple create credit/money to pay the interest charged on the credit ‘Pseudo Fiat’ issued by a private bank simply makes the point clear – why have the bankers issuing interest bearing public fiat in the first place.

        The core functions of government are so numerous that the state could provide all the interest free fiat the economy could possibly require while avoiding inflation or deflation.

        MMT talks about the amazing powers of fiat and soveriegn government but ignores that the private banks have almost monopolised (over 90%) money creation and the bankers constantly howl at any calls to shift the power over money creation more to the public sector. i.e. run deficits.

        It is disingenious to talk as though Bankers Pseudo fiat does not practically curtail the power of the state or to ignore the booms and busts driven by excessive issuance of Banker IOUs masquerading as public money. Bankers fiat creation crowds out public fiat in a very direct and practical way if inflation is accepted as a constraint.

        The proponents of MMT may be deliberately ignoring the massive role of bankers credit as public money in order to limit attacks from those very vested interests but even that is a failure because the FIRE sector has sniffed out the implications of MMT calls for more public money creation and redicules them as money printing.

        The only way to to make progress is to expose how banks have hijacked the concept of public money as law and the public trust and immediately start draining the swamp?

        Concealing the role of bankers and their Pseudo Fiat makes the project impossible.

        How to drain the swamp?

        By restricting private bank credit creation and expanding the supply of publicly created 0% money to replace the deposits that are destroyed as private banker credit is repaid.

        The idea that the current monetary symptom will respond to some good intentions and assurances by the FIRE sector are farcical.

        MMT fans would do better if they stopped whining about the growing popularity and understanding of true chartalism and get with the program.

      • ErmingtonPlumbingMEMBER

        “why have the bankers issuing interest bearing public fiat in the first place.”

        Yes, Why?
        Is it just the private enterprise/bureaucracy is more efficient than The Government meme or is there another rational behind it?

    • “give one argument…” I’ll give you one word, Draghi… The idiot. Made me a cool chunk of change shorting EURJPY last night…

    • BaldbadgerMEMBER

      Let me play the bad cop Brett. I recently played golf with a professional currency trader who was bullish AUD for these reasons.
      1. Our low government debt which is the envy of most other western nations.
      2. Low unemployment rate.
      3. High GDP relative to other OECD countries.

      These are the headlines and we can dissect these figures as much as we like but this is what the masses see.

      Ps. I believe you are right but this is the counter argument i hear from educated people.

  9. brettnicholsonMEMBER

    Also I wonder where Craig “boom baby” James’s stop loss is and I switched on Switzer show last night and listened to their GDP discussion – Switzer takes the cake for BULLS. He can’t possibly believe what he’s saying can he

    • You mean, the one which can make 666 cups of brown liquid?

      Eurrrgh! That reminds me of the old country in the days before revolution. We had something which colloquially was called “Nechezol” (rather hard to translate it but Wikipedia has a great background on it: https://en.m.wikipedia.org/wiki/Nechezol )… It was gawd awful stuff..

      • Thanks Ino. I’ve now added “necheza” to my list of descriptors for political speeches.

        On a more sober note, do you ever see a set of circumstances that might lead to a repeat of December 1989 in this country?

      • > Thanks Ino. I’ve now added “necheza” to my list of descriptors for political speeches.
        Careful though with the pronunciation – the “che” group is pronounced like “que” and not the English [tʃ] and all the “e”s are pronounced like the “e” in “erection” 🙂

        >On a more sober note, do you ever see a set of circumstances that might lead to a repeat of December 1989 in this country?

        Which country are we talking about?

        .ro? Don’t know. That one took 50 years to happen. At the end people had nothing to lose anymore, and they all had a common enemy – so when the critical mass was reached – it happened.

        .au? Even more doubtful – as long as people think they stand to have something to lose, as long as they are comfortably numb and distracted, as long as they do not have a common enemy – there will be no change: violent or otherwise. Then – there is the question of the vastness of the place: 23 millions in a territory half the size of queensland or, 23 millions spread across the entire island: it’s pretty hard to gather critical mass to do anything.

        Hell – in my days – almost at a drop of a hat we had 5-8000 people show up for a demonstration against the president of the country. Here? you’ll get police 3-4 times the number of demonstrators… if it doesn’t rain… or it’s not too hot. Or, there isn’t something more interesting on TV… or some sale somewhere…

    • I call it ‘Industrial Roast’. I also drink Lan Choo, which is made from the weekly floor sweepings of a Lipton plant. After work, I have a nice Town House vodka – the most Australian (and possibly the worst) vodka on Earth.

      • ErmingtonPlumbingMEMBER

        I used to be quite proud of my International Rost in the cupboard,..full bodied and Thrifty.
        But now I’m a bit of a quality caffe aficionado I look down my nose at the drinkers of the International Roast.
        If “young me” ever meet “Now me” Im sure he would consider his future self, a Wanker.

  10. Yesterday’s trade deficit of $1.5B was equivalent to 60,000 Corollas at $25,000 each or 20,000 apartments with $75,000 worth of imported components.

    Clearly our scented backrubs and bean grinding services supplied to tourists or education services are not filling the gap.

    Apart from lots of dirt and agrarian products we are not selling much from the physical or even services realm.

    The only reason our exchange rate is holding up is due to the high quality exports that everyone refuses to talk about. Oh and despite some suggestions that it is a good thing in itself, a low exchange is nothing to be proud of – a high exchange rate due to actual trade performance is something to be proud of as it means your output is genuinely in demand.

    Exports of title deeds to our land, infrastructure, and industries.

    Exports of claims to the future income of our government and our households.

    Creditors will smile and continue to extend you credit right up to the point they assess you are at maximum credit.

    Then they slam the credit window shut and start the process of extracting their principal and accrued interest.

    They will give you no warning but once you have fully extended your credit limit you will be under no misapprehension as to your predicament.

    All those calling for lower mortgage mortgage rates (calling for a lower target rate is a related but slightly different issue) that depend on taxpayer guaranteed imports of wholesale capital are complicit in this process.

    Australia is living high on the hog on credit extended by our fair weather friends. We will soon find out how friendly international creditors are when the time comes to pay the bill.

    • As the saying goes, they’ll give you enough rope to hang yourself. Whose fault is that? Ours or theirs?

      • Our politicians and policy makers and economic commentators.

        They failed to question some simplistic theories even when the consequences of adopting them as sacred text were becoming obvious.

        I assign less responsibility to the general public who were assured that the magic pudding was a legitimate and sustainable diet.

        The most guilty – the very intelligent brains for hire shills who understood exactly what they were getting the country into.

        Just about any private bank talking head fits the description.

      • The most guilty – the very intelligent brains for hire shills who understood exactly what they were getting the country into.
        Guilty of what? Most of these guys are just feathering their own nest, BUT isn’t that precisely what they should be doing according to all the dominant economic theories…I’m kinda of the opinion that even Adam Smith would praise their efforts.
        I work in finance these days but I have no love for it, so many f-ups to deal with and so many very rich customers that are about as dumb as they come. I’ve already told my partners that my time is too valuable to me to be completely wasted just to make them even richer. But what should one do?
        I look at Elon Musk and his Mars project…..Is that really the face of 21st century sanity? why would I want any part of that undertaking?
        I’ve also concluded that Australia is just not my problem, great place to visit but I wouldn’t want to waste my life trying to implement change where it’s just not wanted. My wife wants me to just buy a yacht and cruise the world, and that’s about the best proposal that I’ve heard so far.

      • CB,

        The ones I am referring to do not say what you just said.

        You did not claim that Greed was Good – you made it quite clear that you think it is pretty unpleasant.

        If they did we would not have the model we currently have because the majority of people would react the way they usually do when someone says

        “Hey suckers we are ripping you off”

        A less dysfunctional monetary /banking system would allow smart capable people to still work hard and be successful – just in more productive ways.

      • 007…

        You are want to push your memes…

        The monetary system is not dysfunctional, its just being used by ideologues to push their agenda… the same system could easily remedy all the core problems were facing if it was not for the grooming of both political operatives and economic mouth organs…

        Disheveled Marsupial…. hard to square promoting a system authored by one of the key neoliberal architects as a solution…. to anything…

      • pfh
        “Our politicians and policy makers and economic commentators.”

        Our economic faculties and academics are right at the core of this. This economic stupidity was well established in academic circles by about 1967. That’s just my experience and it may well have crept in prior to that. There is an industry of higher recognition and salary based on bigger and bigger fraud. Once the fraud starts it can never be reversed and just goes on to be bigger and bigger frauds and fantasies until you get to the likes of the total inanity like MMT with its own Gods/Professorships and academic path to higher material benefit.

        Great article from HnH beautifully written but I still reckon the real gem lies with Mark Twain”s comment when observing a group of poor negro women
        ‘They eked out a meagre living taking in each other’s washing’

        That’s exactly what we do on a national scale.

      • “Is that really the face of 21st century sanity?”

        Does the future of the human race not involve colonising other planets?

      • flawse, I like to think of it as sitting at a 24/7 all you can eat restaurant continuously ordering meals in an experiment to see if the bill will ever come, but yes, some just wash each others clothes

        AB – the world is far from rational, and further still from being sane.

        Escaping the insanity by leaving and colonising other rocks in space is one solution, but is it really escape, or just spreading the contagion outwards?

      • Skippy,

        Meme? I thought it more a striped trope.

        I see that you are now attributing the concept of fiat to monetarists. The concept of fiat or money as law is much much older than that. Even older if you consider law as essentially trust. Another way of putting it is money is credit.

        It is just a question of whose credit the state should recognise as fit for public money.

        Yet despite that you are constantly trying to flog a monetary system where the state gives privileged status to the IOUs issued by specific organisations. With the assurance that if only we could find good bankers and good regulators – wise men we can trust – this cobbled together barbaric relic could be made to function without blowing smoke and black oil over everyone.

        “Don’t worry this time for sure Rocky”

        “Bullwinkle! – again that trick will never work”

        It is almost as though you don’t realise that a banker’s IOU historically was nothing more than a receipt to record the acceptance of a deposit of gold for safekeeping. Of course there would be no problem with that unless the bankers developed the habit of writing more receipts than the gold they had stored for safe keeping. In other words no problem with using banker IOUS except for fraud.

        Yet dispute the sordid and grubby origins of banker’s IOUs and the booms and bust they generated you still sing long and loud that a system based on those shoddy foundations is preferable to the minor reforms involved in ensuring that the public money supply is a system of public fiat or public trust.

        The bankers can still be free to trade in their grubby self issued IOUs that you rate so highly but they will be separate from the public IOUs (fiat).

        People will be free to trade between the two so a poorly managed public fiat will find its exchange value falling against the possibly well managed systems of private IOUs of private bankers.

        A bit of competition between public fiat and the private IOUs (monies) of bankers and others would be a good thing. A competition for the trust and faith of the people who use it.

        You should pay less attention to the over heated aggro coming from former bankers who think they have found nirvana in banker friendly “fiat-Lite” MMT and more attention to the unhappy history of allowing private banker Pseudo Fiat to rule the land.

      • Flawse and 007…

        Firstly… the whole 1967 insinuation is meaningless, event were happening decades before that time and I have zero clue to what your on about grousing about academia. That would invalidate AET and neoclassical to include M. Friedman and his AnCap son. FYI MMT is grounded on demonstrable events and not just Theoclassical musings, see Keltons track recorded.

        “Milton Friedman, who has died aged 94, was not the most important economist of the post-war era – that title belongs to the brilliant Paul Samuelson – but he was certainly the most controversial. Yet despite his views being championed by so many politicians on the right, it may come as a surprise that Friedman’s career as a policymaker largely ended in failure.

        Given his status as a long-standing hate figure, the assumption by many of the left is that his agenda was cemented into place during the Reagan and Thatcher administrations in the early 1980s, especially Friedman’s well-known view that inflation is solely influenced by changes in the money supply. But very few of Friedman’s most cherished proposals were ever put in to practice. Of those that where – such as monetarism – almost all turned into failure.” – snip

        http://www.theguardian.com/commentisfree/2006/nov/16/post650

        Its risible that that the two of you talk in innuendo yet can’t even deal with plain as day historical reality’s, clinging to the last vestiges of the right wing agenda of – free markets – to the point of completely disavowing any responsibility, worse, making shit up and throwing it anything else.

        “The Federal government does NOT sell debt to fund itself! The mechanism of issuing bonds is a holdover from gold standard days. Greenspan and the Bank of England both have acknowledged this (it’s now even in BoE primers).

        Treasury bonds functionally serve as a risk-free asset for dollar investors. The Fed could just spend directly, but then cash would pile up somewhere, and the bonds are an alternative way to hold financial assets safely.” – H/T YS

        Flawse….

        You twist everything to fit your narrative… never said fiat was monetarist based… duh… I said monetarists bastardized fiat to suit their ideological and political views, by trying to imbue fiat with hard currency like traits i.e. targeted inflation or Milton’s 2%. Your drama is because of your free market beliefs and how you view regulation e.g. you would rather a small cabal of ideologues in government dictate the supply of money and let the free market sort everything else out. This is why even today you can’t figure out the Fed is currently staffed by quasi monetarists still screwing around with IR.

        Disheveled Marsupial…. just can’t get over the quasi religious zeal you guys have about your devotion to what amounts to deductive reasoning or better put a sociopolitical template and not an honest academic examination of events.

      • “Its risible that that the two of you talk in innuendo” skip said that? Wow. Just wow. Juuuuusssttt Woooooooow. We are through the looking glass.

      • Skippy

        You just proved that you are ignorant and you shhot your mouth off at me without even attempting to read even teh first sentence of anything I write.

        “MMT is grounded on demonstrable events and not just Theoclassical musings’ Bullshit! MMT is grounded on ignoring any fact that is remotely inconvenient. IOt is also grounded on teh thought that the USD is the reserve currency of the world; that it will always remain so; that the world will forever keep accepting what will eventually become useless paper. The signs of the end of this era that started with Nixon repudiating US debts is coming to an end.
        You show appalling ignorance of even the most basic economics by quoting clowns like Wray et al. They and you cannot even tell teh difference between the US and Aus. Strewth!!!
        Note Aus is NOT the reserve currency and as such, even in the very short term, MMT is complete and total fraud and relies for its truth on selling the country off to foreigners and hoping nobody notices while the MMT brigade institute their particular brand of extremism.

        BTW even the simplest moron can tell teh difference between what people like pfh and I write as compared to the straight monetarist crowd. Matter of fact it’s fair to say that MMT is an already flawed theory taken to fraudulent extreme. You’re in the same sinking boat – you’re just pumping more water in instead of trying to pump it out.

      • Mig…

        That you pop up and add nothing to the relevance of the topic being discussed, except to put pop off is classic frat boy mig.

        Look I can forgive flawse for clinging to his indoctrinated biases and failure to reconcile past and present due to an almost fundamentalist position, albeit grounded on everything under the sun was settled before stuff was stolen mystery theater, but 007 has a penchant for reinventing english terms and meaning to suit his world view.

        I mean advocating a theory put forward by Friedman and the Chicago boys… especially when its just flogging a long dead horse in a vain attempt to reanimate a set of assumptions which have been proven wrong and its not even relative in our currant problem set. The system is fine, its those in controlling it that is the issue. His whole bankers money shtick might as well be fleshed out as the ev’bal jews or rothschilds youtube video the real truth explanation or the monster from jekyll island fictional novel.

        Disheveled Marsupial… then there is your penchant for mythologists mig, I still remember Freud vs Jung death match and just about every other scrap. Some days it like telling the kids that there is no Santa or Easter bunny…

      • Word to the wise and FYI skip, from the very day you turned, and those many long days battling pursuant, I still think I’m one of the very people who get what you’re one about. Generally. And it both titillates and horrifies you. See a shrink guy

      • Skippy,

        “…….clinging to the last vestiges of the right wing agenda of – free markets – to the point of completely disavowing any responsibility, worse, making shit up and throwing it anything else……”

        Is that the best you can do?

        Rather spit and foam why not try responding to the many points made about the deficiencies and blindspots in MMT that have been identified.

        Just for starters try providing a justification for treating the credit creation of private banks as if it were the credit creation of the state.

        You have dodged even that basic question for weeks now with obsfucation and your high velocity poop spray device.

        Surely, you have some link to someone who at least tries to provide a rationale. You might have to go beyond your MMT reading list as all the ones I have read seem oblivious to the distinction.

      • Full disclosure, I’m only keeping this going to encourage @notgunnamatta to give us weekend edition, so I can go back to dropping rhymes

      • 007….

        I can’t find any meaningful way to reconcile your comments because they are nothing more than conjecture, which is absolutely detached from operational observations or historical perspective. So far your only retorts amount to bankers IOUs and the Chicago plan was not written by monetarists contrary to all the evidence and as the evidence builds against your attempts at selling it become shriller and shriller. Just repeating over and over Banker IOUs and Chicago plan – positive money – no debt – is a mind bending simplification.

        “What banks do (and this was also described by H Minsky) is not to create money, but to *endorse* (underwrite) a buyer’s negotiable debt instruments because vendors are more likely to accept debt instruments underwritten (or from) a well known bank than from an unknown random buyer. But it is vendors (creditors) who ultimately decide what money is, but accepting (or not accepting) something as payment.”

        The biggest difference between MMT and the positive money camps is MMT is describing the system we have and what it can do contrary to what economic and political ideologues believe or lie about, compared to the positive camp wanting to completely change the system in the expectation that unlike all the other failed conservative right wing free market policies this will finally end all the corruption and fraud.

        Come on 007 your in Ellen Brown territory here and that is loon pond CT padded cell territory…. Banks commit fraud because it was enabled by free market ideologues, not that banks intrinsically commit fraud e.g. banks are supposed to underwrite risk, free market morons said rational agent models dictated that regulation was unnecessary along with a long list of stoopid ideas like zip capital controls or taxation is theft. That will happen when you get human behavior so completely wrong, but who cares when some think deductive reasoning or warmed over monotheism is a sound methodology to use as a methodological frame work to flesh out reality….

        Disheveled Marsupial… can we stick with reality and desist with the arm chair thunkit… its been a bloody neoliberal mess…

        PS. Friedman started the whole shareholder meme… FFS….

        http://www.nakedcapitalism.com/2014/05/guess-who-is-responsible-for-the-corporations-exist-to-maximize-shareholder-value-myth.html

      • SweeperMEMBER

        Skippy,
        That Guardian quote about Samuelson is classic journalist fabrication. Tobin was easily the greatest post-war macroeconomist. Samuelson even admitted that.

      • Sweeper….

        I only posted the Guardian article due to its reference to Friedman and his aftermath and had no dog in the hunt over Tobin or Samuelson, tho Tobin did marry a student of his….

        Persoanly I disagree with Samuelson due to his neo or feel good Keynesian cough neoclassical opinions, see Krugman, where at least Tobin was looking at risk factors. Sadly nether understood the operational factors of such concepts such as control fraud et al.

      • “such concepts such as control fraud et al.” What even gives rise to control fraud? Oh I know that toothless academic proscribed reg *cough* regis *cough* king * cough* ulation you love so much.

        Academia is a même, started by academics…

      • Skippy,

        More dribble, foam and evasions.

        Address the question – what is the rationale for giving state protection and the camouflage of public fiat to a private IOU?

        And no that reference to Minsky does not help you. That could apply to any widely used and respected private IOU traded for value.

        And yes I noticed your slimy inference of anti-semitism.

        What a disgraceful grub you become when lost for a cogent response.

        If you are not up public discussion in a civil manner give it a rest.

      • mig….

        “such concepts such as control fraud et al.” What even gives rise to control fraud? Oh I know that toothless academic proscribed reg *cough* regis *cough* king * cough* ulation you love so much.

        Academia is a même, started by academics…”

        What are you mangling now, does your brain even have the ability to move beyond the simple vacuous optics by which you can contextualize all of human history in to nice little convenient compartments. What is it with people that think they can ruminate about stuff up in their head and then proclaim its – is – we had prophets for that kinda monkey goo.

        007…

        “Address the question – what is the rationale for giving state protection and the camouflage of public fiat to a private IOU?”

        Your playing semantic games 007, the state does not give protection or camouflage to banks, banks are just like any other corporation which holds a charter to operate and if you have forgotten government spends first with sovereign fiat when banks issue private debt which is notated in FRN, banks don’t have printing presses or treasury key boards to create fiat. Hence you can’t even get that right.

        “And no that reference to Minsky does not help you. That could apply to any widely used and respected private IOU traded for value.”

        If you say so having come down off the mountain 007… you know since your so widely attributed.

        “And yes I noticed your slimy inference of anti-semitism.”

        Um no that was a direct reference to AMI and not a personal view myself holds, my grandfather was Jewish. The bit about ev’bal Jewish bankers was clear so you obviously are attempting to spin it.

        Disheveled Marsupial…. really don’t get your “growing popularity” wrt AMI stuff, can’t see it in the tube or in the political sphere, where as MMT is…. see Sanders and Congress.

  11. I cannot see what is wrong with an economy of “endlessly dividing paradox of insignificance”?
    these businesses provide needed or desired service, provide job and income for business owners, provide government with the tax revenue, ….
    why would economy need to be largely tradable, or have ability to flower much beyond the local shops. Why would economy have to grow and generate wealth (we have more than enough of it)? Why would we favour wealth over wage income? Is there a need for more “organic capital” and finally why does anyone need breakthroughs in efficiency (economic efficiency)

    I don’t think we need another conservative movement in economics to return to the glory days of post WWII era. It’s questionable even if that model was any good for that era not clearly for our age. Going back to the old paradigm of endless growth of consumption, productivity, efficiency, while feeding the old capitalist beast with live bodies of our sons or environment. Do we need return of neoconservative economics?

    world is waiting for new ideas beyond exponential growth of consumerism, productivity and efficiency

    • I’d have no issue with these businesses if they weren’t ultimately indirectly reliant on massive doses of foreign debt to pay for our way of life. Essentially, like primitives, we are selling off our land in one way or another for shiny foreign things.

      • foreign debt is used to increase wealth of the rich class not to finance lifestyle of a small barber or coffee shop owner

        Did Holden factory plant workers made decision to stop working in tradable and productive sector and rather turn to foreign debt financed service sector? or someone else made that decision for them? maybe the very people who either give us or mediate that credit supply ?

      • Sorry, I expressed myself poorly.
        Actually, I don’t have an issue with these businesses per se. The foreign debt run up for our housing bubble (for instance) then feeds through into the services sector and pays for our imports. The fact that our entrepreneurial focus seems to be in these businesses and not activities that will pay for our imported lifestyle is the macro economic issue here. You are correct, the political economy is organised in a way that it is the rich who are getting richer from this arrangement and not the poor sods who work 80 hour weeks running the small businesses.

    • No need to throw the trade baby out with the dysfunctional capital flow monetary system bathwater.

      Trade and movement of people between countries is a good thing. When it is driven by a frankenstein wealth extracting monetary and international credit system it simply reflects that dysfunction.

    • Ronin8317MEMBER

      Beyond the issue with borrowing to live like this with a chronic current account deficit, spending resources on frivolous things is no different to how the the Easter Islander tribes tries to out do each another with more elaborate statues, and end up denuding their entire forest.

      The issue goes deeper than just people being lazy and self indulgent. In a market based system, individuals cannot make decisions that benefits themselves, so projects that benefit the collective with no obvious pay off can only be undertaken by the government. When the government also buys into the neo-liberal mantra of ‘taxation is theft’, then nothing useful gets build but our coffee is great.
      As to export, where can Australia export to in Asia without tariff beyond Singapore and HK? I would be happy if Australia manufacture more things for just Australians.

      • Pure speculation, no one knows why they did that, or who did that. Quite possible the statues were there long before the last inhabitants of Easter Island

    • This is the most sensible comment on here. In a world with increasing automation and where ‘efficiency’ drives relegated more and more workers to the scrap heap, what better way to keep yourself earning then via your own hard work and creativity? We are going to have to find a way to keep people active in the economy when automation takes over, and increasingly intricate services and creative industries will probably be our saviour….that and the fair share and distribution of the capital now generated by hardworking robots.

      Marx was a cupcakery owner

      • Pfffft the Luddites burning looms didn’t help anything, what happened with industrialisation was some of the people who previously were chained to the manual looms became store owners selling all the excess and now suddenly affordable capacity the factories provided.

      • Miguel, great way to take a comment, read what you want it to mean, and then just talk about what you want anyway. Are you a politician by any chance?

        If automation does relegate a majority of the manual (and not so manual) to unemployment, there will have to be some sort of economic change as it relates to capital. Also, I doubt a further shrinking of capital into fewer pockets will help anyone, lest of all politicians.

        At least Luddites could set sail for the colonies.

    • what’s more likely is that the world is waiting for old ideas to be plagiarised and enacted by the next bible writer

    • SweeperMEMBER

      Was thinking the same thing.
      Why is this a bad thing? People have jobs which they are excited about, the work environment is probably much better than an office or assembly line. The consumer gets a high quality product, has more options with their leisure time. Leisure (unmeasured) becomes more valuable. The inventory cycle no longer comes in to play. There are a lot of positives to a return to small trader pre-industrial capitalism imo (v industrial I mean).

  12. Top write!

    Re the back. Try finding a bar around the house to ‘hang from’. Hanging stretches the spine and works wonders on ‘office backs’. It’s fixed my problems. And it’s free. No dealing with the narcissistic economy.

  13. Truly wealthy countries are supposed to have a High and a Low – a comparatively high exchange rate and low interest rates. Their export of goods and services drives the exchange rate up, and the lack of need for foreign funding and the converted export receipts drives their interest rates down. Poor countries are supposed to have a low exchange rate and high interest rates for the same, but opposite reasons.
    That today, we have most countries with two Lows – low interest rates and a desire to lower their exchange rate shows us just how broken the system is. The answer that is coming, of course, is a return to fixed exchange and interest rates, exchange and capital controls, and protectionism.

  14. The reductio of this insightful and entertaining article is the Groom of the Stool – https://en.wikipedia.org/wiki/Groom_of_the_Stool When those high achieving attractive Australians have a stool grroomer the economy will have fully pivoted. Seriously this is the sort of ting the govt and the industry lobbyists want but they call it entrepreneurship.

  15. Wanna known what’s tradeable? That intellectual property you say is being supported… Not a day goes past I don’t get offers to work remotely for a US or UK or German or wherever software firm…

    • Congrats, that’s awesome for you, and yet we still had a $1.5b trade deficit…so as tradable as your skills are, there’s somewhat of a volume problem here then isn’t there? I’d say that for every one of you in the Aus economy, there are 1000 people in the subcontinent with similar capacity to export their skills for a fraction of your cost – I, of course, make no warranties as to their ability to interpret and follow instructions, but you get my point.

      • India is not Australia, less a Sweden. If India had a thousand for every Miguel to in develop software for medical machinery, India would be a first world country.

      • Dude 70% of technical people on my floor are from the sub continent, can you imagine the even more ludicrous fees I’d get charged out at if they weren’t here? Im glad they’re here, I have too much work as it is

      • I know that was my point, but how many Indian bloggers are coming for your lunch? Bwaahaahaahaa. I was simply stating that if instead of building houses we’d built tradeable skills… Well..

      • H& H (not to offend) MB is more like a deconstructed latte than a ship load of dirt.

        The masses in the thrall of the MSM would look at your (our) project as an unnecessary deconstruction of a simple whole.

        Just about perspective.

        Great topic, and points to how much sh*t we are really in here !

    • if you can trade it it means that you don’t need to work hours ie hold a product with a license. Otherwise you are putting yourself into slavery.

  16. moderate mouse

    All tip and no iceberg. Aussies like to think we are superior – especially compared to Americans. But the reality is that Americans can be monumentally stupid sometimes, but in the majority they are smart and thoughtful. Australia is majority stupid. We have glimpses of insight, flashes of brilliance, but the baseline is stupid. If you disagree, ask yourself this: America went to the moon almost 50 years ago. Could we do that even today? I say no. It’s one thing to preoccupy yourself with coffee and boutique barbershops and all the rest of it. It’s another thing altogether to do it with a chip on your shoulder and think you’re at the vanguard of human progress.

  17. I was watching RT this morning and managed to catch most of the Kaiser Report and, for all his insane rambling, Max managed to make a good point that, although it was in relation to a different matter, I think is relevant here.

    What the deconstructed long macchiato above tells us is that there is an absence of scarcity. We’ve the ability and capacity to produce enough things to meet our own needs – very rarely is a store out of the things that will get us through tomorrow, the next week, winter etc.

    We’ve enough things, however the mindset that one must continue to innovate, even though our basic needs are met, has led to one person deciding that three beakers for one coffee is an improvement. How this is substantively different to folk ordering tea in a cafe and receiving a pot filled with hot water, milk and an empty cup is a question I can’t answer.

    I don’t think the existence of three beaker coffee is a sign of the apocalypse. Perhaps the overreaction to a thing that doesn’t matter (in the grand scheme of things this coffee does not f***ing matter) is a sign that we allow ourselves to get distracted by a small aspect of a larger problem (that there are limits to innovation benefiting mankind as a whole) and miss the point.

    • I suspect such boutique services are actually about inequality. Their consumption is a status marker. Come to the US and you will see this. I was just in Portland OR, and on my way to a pricey restaurant I walked past a woman in a wheelchair who took off a sock. One of her toes was dead: a black shrivelled thing. Yet not 200m away were restaurants selling $80 bottles of wine. The resources clearly exist to treat and care for such people, but they’re not allocated as such.

      • When I lived in the US, I hired a company to tile the floor of my new house. One of the workers was a 20 year old with a bad limp. I asked him why he was limping and he said he had broken his leg when aged 16 and since his father was not insured, he was unable to have it set properly. In addition, he’d been unable to pay for subsequent treatment he’d sought for it, leading to his credit being dinged. With dinged credit he was unable to rent an apartment, so he was forced to sleep on the kitchen floor at a friend’s place. I kid you not. This is a so-called “first world” country. This brutality is one of the reasons we left the US. 😯

      • “I suspect such boutique services are actually about inequality.”

        You’re right. This is actually closer the point Keiser made this morning. The production of goods, due to innovation in automation, requires fewer humans. We’re able to produce enough to meet our needs. Scarcity should be dead. Head into any store in any area in the US which has been hit by the offshoring of industry and they have an abundance of goods.

        The problem is, for those removed from the direct benefits of this increasing automation in production, they can’t really afford to purchase the goods on offer. The direct financial benefits (i.e. experiencing an increase in income) of increasing productivity are flowing to fewer and fewer people, and far many more are finding their lives worse off as they experience a decrease in income.

        I am aware that I am making a confusing point here, especially considering that serving coffee in three beakers has nothing to do with robots making stuff. The mentality behind the decision to put deconstructed coffee on a menu is not inherently bad, it’s an attempt to innovate, to see if there exists room for a new product in the market of insufferable coffee snobs.

        Where it fails is in execution. It’s a poor attempt to innovate because it does not really bring improvement in the production and delivery of coffee and it fails to consider the general nature of the coffee market and especially the needs of those who consume it. But this is where we are in Australia. Moaning about somebody who pours and serves coffee in a wasteful, inconvenient manner, because they think it might “add value”, because largely, the only “value” that can be found in the service industry is to try and differentiate yourself as a boutique provider who charges more to the well-off due to perceived, rather than tangible, improvements.

      • you’re describing a society where the waiter who is serving that bottle of wine requires you to tip them to make enough money to pay the rent

        it’s probably a good reason to look at their policies, and if not smart enough to dissect where they are wrong, simply do the opposite of

  18. Thanassis Veggos

    I have discovered a manufacturing company that actually has a real factory in Melbourne, with machines and warehouses and trucks and stuff. And I managed to get a job there. It’s the only sane place in australia, I’m gonna stay there till retirement.

  19. FiftiesFibroShack

    Get a stand up desk = save money on back massages + increase your healthspan.

  20. BobTurkeyMEMBER

    Man, hope the back doesn’t fossilise anytime soon. I’m enjoying this!

  21. the services economy in all of its pathetically misplaced glory.

    Ha, one of your best essays, Dave. In the meantime, we are not acting as the world’s boiler room for renewable technologies, despite having amazing geographic and climatic advantages that scream out for us to take advantage of, in order to pave the way for the world to follow. We could be the world’s testing ground. We could hold the patents, create the new billion dollar companies, the new “Nokia of solar energy”, why not?

    Instead, we have ribald idiots strutting the stage proclaiming “coal pollution is humanity’s friend” and other absurd inanities. FFS

    —-

    On another topic, here’s a surprising and really informative podcast I heard last night, highly recommended:

    Richard Duncan: China Is Facing a ‘Serious Crisis’ (podcast)
    http://www.financialsensenewshour.com/broadcast/fsn2016-0528-2.mp3

    China experienced the “greatest economic boom in the history of the world” based on an export-led and investment-driven growth model, says Macro Watch’s Richard Duncan. Unfortunately, with a slowing global economy and decreasing demand for Chinese exports, China is now facing a “serious crisis.” Richard discusses the magnitude of the problem, how Chinese policymakers are handling it, and how the move towards protectionism in the US and abroad is a problem as well.

    • haroldusMEMBER

      yeah but what killed the Golgafrinchans that stayed (it wasn’t the enormous mutant star-goat)

    • Mining BoganMEMBER

      Optimal Hipster Wankery is a great name for a band. Someone here was starting a punk outfit. You may use.

      • haroldusMEMBER

        who was it? I’ll have some of that (being an OK guitarist and writer). Let’s compose via NBN!

      • The first track shall be called, ‘The Ballad of ScoMo’
        It is 2 minutes and 27 seconds of pointless noise with random three word slogan yelled over the top.
        Mig and Skippy shall provide the words that will make up the slogans.
        Briefly will take said words and create beautiful nonsense out of it.
        Anyone who has never played trumpet or saxophone shall be invited on stage to be the horns section.
        Gunna is the manager of said band.
        No gobbing allowed.

      • Whoops, I forgot the manifesto.
        All good punk bands need a manifesto.
        Let’s have at least four.
        One from Stephen Morris
        One from Gunna
        One from Briefly
        One from Janet
        They are all good with those word things.

      • Yes, and they just need to arrange a double act called Optimal Boomer Thievery to take the edge off

      • Young OK,

        The cost of going to see the older bands touring their back catalogues is Optimal Boomer Thievery.

      • yes agreed, ACDC bringing in Axel Rose… the aged pension isn’t that bad is it? or is cocaine that expensive?

      • Mining BoganMEMBER

        I’m not sure about haroldus and his hanging by the nipples thing. I stop at piercings.

        Footsore. What is it with the cost of music tickets? They’re in a bubble too. Just saw an ad for Ron Peno doing some old Died Pretty songs. $30. Should be $10 with a free schooner. Sorry Ron, I know you’re reading. *waves*

        Actually, that might be a good night. Better than seeing another last outing by Cold Chisel, 33 years after I paid good money to see the Last Stand tour. On first year apprentice wages too mind you.

      • I can understand $30.
        These muso types need food and shelter like the rest of us.
        I’m always happy to give Mr. Ed Kuepper a bit of my gold.
        (Were you at Laughing Clowns, at the Tanks in 2008. Good show)
        It is the likes of the already well-to-do Mr. Robert Smith wanting $142 to see him sing a few tracks from the 80s.

      • haroldusMEMBER

        young OK Axl is actually quite good with ACCADACCA!

        I wrote a gratefully received monologue to my band mates about it and I’ll see if I can dig it out tonight after some red infuriators

        also I’ll get started on the noise backing track with some 3 word slogans from Markus, my Mac’s german voice. I don’t think they have Mattias the Belgian.

  22. I am actually thoroughly enjoying Australia’s hospitality businesses. The food is superb, as is the wine and coffee. The overall experience is far, far better than what passes for ‘hospitality’ in The Netherlands.

    I would probably even have marvelled at the deconstituted coffee. I’m a sucker for these things.

    The sting is in the fact that there is no base and the lack thereof is obvious for those who look around as you did.

    Heck, in The NL people baulk at the amount of unsightly business estates everywhere, all filled with producing, trading and enabling businesses. They are considered an eyesore in a country lacking space and nature reserves. I will never look at those the same again.

    • right.. the assumption is everyone sitting next to you is a man! (**looks around and whispers** “Where are the feminists when you need them”)…. what if.. what if the person is a not a man?

      • I know you’re being facetious, but if you can think of a gender neutral word as brutally apt as “circlejerk”, I’m happy to reconsider my metaphor.

      • Why Virus, the circle jerk is how all business works in OZ, regardless of any industry, mining, wholesale, retail…One needs to bow down to the man…the peacock syndrome..where you wait in line , positional to your status, women are/have been relegated to the end of the line, regardless of skill/talent…smart women make the allowances, its how it works and always will..

      • what if.. what if the person is a not a man?
        And to think a few weeks back while sitting in a bar in Tokyo and my biggest worry was that the person sitting next to me might be a man.
        Used to be just Bangkok and Manila that you had to watch out but these days ladyboys are all over NE Asia, talk about a growth industry.
        Now there’s an example of an exportable local health services opportunity for our surgeons, it’s got to be huge…well maybe not…but you’re gunna cut it off anyway.

      • ErmingtonPlumbingMEMBER

        Circle Jerk/Flick,…there problem solved.

        The Circle jerk/flick is not to be confused with the similar activity of Soggy Sao or Soggy Biscuit.

        Circle Jerk/flick, can also be a slang term for an echo chamber.

      • Not only that – but what if the person is left-handed? That just promotes inequality – some get twice the action while others get none… that’s unfair!

      • haroldusMEMBER

        I actually have a song called ‘Daisy Chain’! It’s where a group of gentlemen friends form a circle and sit on each others’ lap!

        Enjoy the mental image!

    • actually, when you are quoting yourself, or providing self service, there is no circle, it’s just an independent jerk motion.

  23. In Paris few years back I ordered a coffee, and that was pretty much one of maybe 2 options as far as coffees go.
    Also considering I was in the land of cycling, was surprised I could not see one cycling commuter wearing lycra. Don’t they know of its outstanding aero-dynamic properties J. Maybe lack of ‘End of Journey’ facilities at the office.
    Not sure what drives us to this wankery.

    BTW, HnH, when are you changing your name to Houses and I, Factory?

  24. This is modern Australian “productivity”: asking one to pay more for fundamentally the same thing.

    Then the wealth that has allowed this to happen, and given these people the mistaken impression that they are actually adding value, proves either illusory or transitory.

    • until that barista can make that triple beakered coffee appear out of thin air then they aint got anything on the accountants

  25. I stopped reading this post at “.. story yesterday as I awaited a back massage at my local shops..”

    First and foremost, I am in awe of numerous blogs that you guys put on MB everyday. Most of them are quite informative and valuable. I keep thinking to myself, how the f**k do they do it?

    On top of that you say things like “..i was getting a massage..”… I don’t know how you guys do it.. but if you have some tips on time management please do share.. I would love to be as productive as you guys are!

    hats off .. legends!

    • I stopped reading this post at “.. story yesterday as I awaited a back massage at my local shops..”

      I stopped reading your comment where you said: “I stopped reading this post at “.. story ”

      If you cannot be bothered reading what Dave wrote, why should we bother with your drivel?

  26. yup – what you describe is the shift to the knowledge economy where there is less manual labor and more emphasis on ideas/knowledge

    what is hard to contend with is the fact that the human body still excrements, aches and is a rotting carcas waiting to be fed back into the earth, your ideas await a similar fait.

    the node of the superhuman, whether writing for a murder or flock of self proclaimed lite heterodux perceivers or by providing triple beaker deconstructed brew, or the creme brulee cino – they’re seeking cosmic significance. Have you received your hit today?

  27. Excellent work HnH, and I’m glad to hear that you have so many opportunities to have your person serviced. 🙂

    I’m an engineer working in a business that designs, manufactures and sells things, with a large component being exported. I’ve been working for this outfit for over 20 years now, and I’m starting to feel sad and worried. I love Australia, but the country isn’t heading in the right direction and now I’m starting to fear for my kids.

  28. Landlords need these services to be primped and preened, ego stroked and made to feel important so they can go about their day to day lives and buy more properties.

    I have a work colleague nearby who was buying investment properties over the phone like they were movie tickets. He is the prime customer for all these services, he rattles on about them daily.

  29. Best popcultute macroarticle yet. The socialside of Economics needs to be explored more. This service economy is self-refential and provides the reinforcement that deconstructed coffee navel gazing is “so now” Let’s not worry about the broader economy just think local. Great piece, thank you.

  30. The churn rate on these businesses is remarkable. I’ve been watching it for years. So many of them open up, look super flash, but have hardly any business then 6,12,18,24 months later, they’re gone and instantly replaced by another pointless shop.

    They can’t be thought of as expert artisans or craftsmen because they don’t stay in business long enough to acquire that status!

    The whole thing is a sick social joke. Humans need long term stability to achieve mastery. Instead we have an economy of temporary, overpriced, low quality, amateurish shite.

    • coffee shops used to serve an important purpose – they were places to meet, gossip, exchange infomation, build revolutions, hey, even start the whole insurance industry (Lloyd’s coffee house). Yet now we have FB we don’t do anything like that anymore.

      • Indeed!

        They were called “penny universities” in the UK, but the same pattern existed across Europe. You would pay for admittance to the shop in order to gain access to the newspapers, debates and intelligentsia within. In some cases (like Lloyds), the focus was on conducting business. Coffee was served to stimulate the intellect but it was not the primary focus!

        But Jesus H Christ did we lose the plot on that one. Try having an intelligent conversation in a coffee shop today and it’s really hard because they’re pumping out loud music and have deliberately set up the acoustics for maximum noise. You can participate in a lively debate that has attracted the interest of all people in the coffee-house exactly…NEVER, and if you eavesdrop on the conversations around the shop, the shallowness of the issues being investigated truly boggles the mind.

        It’s just all about the overpriced coffee now, intellect be damned. The whole coffee-house concept has inverted over time.

      • it’s possible that we have stopped thinking and have less to say that others may be receptive to.
        yet it could also be that everybody consumes so much junk that they focus on passing that on rather than seeking the piece of information that will save them from a life of reading MB articles ; )

        who knows what happens next, what I found was that coffee shops are great places to go to get a whole lot of work done as everybody around you is so mundane that work seems more interesting…

      • To be fair, it does depend on the area. Go to a coffee shop in a start-up suburb and it’s full of engineers nerding things up on the free-wifi and talking shop.

  31. No no no no. You have this all wrong. Australia needs far more of this and further more, far more that originates in Australia rather than Instagram and pinterest which is where i bet the deconstructed coffee must have been seen by this cafe owner.
    I don’t think you understand and or appreciate the process of creation. Most creation, innovation and discovery begins in the trivial. That’s why we don’t live in caves any more. This is why big business don’t innovate, your old thought process is identical to h those running our largest companies who believe they are above the trivial and are responsible for greater and more meaningful endeavors. I work with Australia’s larger companies and i can tell you the executives that have their heads up their assess who care not for detail, for trial, experimenting, risk, discovery, to have a go and allow the individuals ( employees) to have some fun and not to take life or them selves too seriously means we have allot of intelligent people getting paid lots of money to do nothing but keep the lights on, and put the vast majority of their effort into play political games to keep the Australia corporate super structure with monopolies and oligopolies alive yet they spend billions of dollars achieving absolutely nothing and this extends into government’s, e.g. nbn. What i mean is, we should have nbn but it skills be being built at a fraction and so even if we spent the same amount as a country, we would get allot more. Now go look at how Google was formed and structured to understand why they have been as succesful as they have been. They allow their staff to build what others believe tho be trivial and wasteful, endeavors that the likes of Microsoft and Oracle, ANZ/BHP (to keep it local) would never allow and compare the outcomes.
    Go look back at history and look through human endeavor.
    I love macrobusiness but this article is tripe and will ultimately lead to the sites failure.

    • Ronin8317MEMBER

      Re-read the article. Nothing wrong with experiments and innovation, but putting the components of the coffee in 3 beakers is not ‘innovation’. it’s just clever presentation. As Australians, we have become too obsessed with what looks good rather than real innovation.

      • Be funny as fuck if three humble beakers of deconstructed coffee earnt proportionally more in exports iron ore.

    • Seeds don’t grow in barren soil…

      The takeaway I got from the article here is that HnH here is that he’s seeing plenty of seeds of innovation all around the place, plenty of little green shoots.

      But the soil has been totally destroyed by incompetent management. I’ve ranted about this in the past here on MB ( http://www.macrobusiness.com.au/2016/05/another-tech-titan-scoffs-at-turnbulls-ideas-boom/#comment-2611848
      ). We can have all the innovative minds in the world, right here, but if there’s no support, no startup ecosystem, no funding, no small-scale manufacturing then it’s totally useless.

      The following DOES NOT HAPPEN IN AUSTRALIA, because speculators pump money into bullshit real estate instead. Bright minds are left with little else other than to innovate on pointless things like a deconstructed coffee, in the only pursuits that are compatible with a Ponzi scheme economy.

      The idea came to Lavingia when he wanted to sell a photorealistic icon he’d created and realized that the amount of effort – even for an engineer and designer with a deep technical skill set – it took to sell an item directly to consumers was considerable. He decided to build a product that would make selling digital content as easy as sharing it.[9]

      In February 2012, while still the sole member of the company, Lavingia announced a $1.1 million seed round from a notable group of investors including Accel Partners, Chris Sacca, Max Levchin, SV Angel, Josh Kopelman, Seth Goldstein, Naval Ravikant, Collaborative Fund, and Danny Rimer.[10]

      Several months later in May 2012, it was announced that Kleiner Perkins Caufield & Byers had led a $7 million Series A round for Gumroad. The investment was the first made by former Twitter engineering head Michael Abbott as a KPCB partner.[11]

      On September 8, 2014, Twitter announced its first commerce product, the Buy Now button, in partnership with Gumroad.[12]

      On September 30, Gumroad released its first mobile product, a utility iPhone app that acts as a mobile library for digital content purchased via Gumroad.[13][14]

      • The following does not happen anywhere in the world outside of Silicon Valley for that matter.. but yes, we should be the last people to talk about innovation because we have no clue in this country.

    • Folks, i’m bootlegging a startup at the moment. It may go no where and in relation to this venture, today i am a nobody but i mention this to give you some context.
      So the idea i am working on was initiallynot understood by friends, family, colleagues. We dont get it. My idea has nothing to do with fintech but if i get it of the ground, the work i do now lays a platform to allow me to take on the banks later. People don’t see the connection and that’s ok but they didnt even understand/agree with the foundational capability being built. Well two weeks ago another multi billion dollar global company launched exactly what i was thinking about. At this point my family/friends are perplexed. They still don’t get it, the product that’s been launched by the other company which looks alot like other products they have. Why have they launched this, don’t understand the purpose that it serves. Sho they don’t get the idea because the other company are probably going to use this as a platform for a larger idea and it’s a start for them as well. What did happen is, wow a large company launched the same thing your building. Now i had described my idea well enough for them all to see the resemblance so i went from, your mad to kudooss for the idea, we still don’t get it, will you continue. Yes i will. Anyway, outcome of that was, hey i want to do something of my own but i can’t come up with an idea.
      And that’s just it. People think innovation is the first iphone or a spaceship that will take us to Mars. Ironically Steve Ballmer (ex CEO Microsoft) thought the iPhone was a fad when fittest launched ( Google it) and they bought Nokia handsets in response and the company folded. Anyway. Ideas and innovation is not about building rocketships and iphones. Both these things are made off smaller parts that were never built for the iphone and may have been built for game consoles 20 years ago (the little hand ones i had as a kid) that would seem as trivial then to the economy as the examples in this article. So i told this friend. You want ideas. List everything you do in your life from making breakfast to selling a multi million dollar deal or building a shed ( doesn’t matter ), on a daily, weekly, monthly, quarterly and yearly basis. Of all these things, list then what you hate about doing them or ehat doesn’t work. Right, these are all your ideas. They can be trivial. Facebook was created by a kid and his friends who wanted to rate girls at college. It’s now becoming one of the major commerce platforms globally. The deconstructed coffee is brilliant because it looks at a problem ( some like straight coffee and others with milk and others with a varying combination. Go ahead and construct it the way you like. It’s solving a problem doesnt matter how trivial because this trivial exercise may inspire a patron into a thought to solving the deconstructing of a protein that’s it self leads to another change, and which the culmination in 10 years leads to the cure of cancer. Nothing around you that is complex and seems innovative is not made of smaller parts that were created decades ago for a much smaller purpose. Again read and understand how we got here as humans. Hope this inspires you all in your own lives. You don’t need to build a rocket ship, just a nut that goes into it. We all do that, and the ticket ship will come.

  32. Also, I can’t help but wonder how many of these businesses have been purchased by the Chinese “investors” as a means of gaining residency and are run at a loss.

    • That’s what Gunna was saying about Geelong.
      The shops in the CBD were leased for one of two reasons.
      1) Money laundering
      2) Visa qualification
      And I’m sure that 1 and 2 were sometimes involved in the one shopfront.

  33. I haven’t read all the comments, but it strikes me that we can still be artisan’s and still create wealth and not be based on services alone. Take a look at a shop like Deus Ex Machina, which very much appeals to the Cafe Racer style and lifestyle, but it’s not just a Cafe, it’s a shop front for clothing, accessories, and motorcycles and it’s a successful export in other countries also.

    I guess it’s a lifestyle brand, but it also appeals to that inner city hipster lifestyle. We could learn a lot from folks like Dare Jennings who founded both Deus but also Mambo which has since been driven into the ground…

    I read an interview of his where he talks about why the corporates destroyed Mambo.

    My point is, that I think there is a market for this sort of pretentious lifestyle services where people want more than just a basic service they want to be pampered or better understood in terms of what they want. So we can export these ideas etc.. and still drive prosperity.

    A Barista could start an artisan coffee brand and export it globally, but we don’t, we focus internally and that’s the problem.

  34. Doesn’t this epitomise a service economy where nothing is actually made within the economy but it acts as a clearing house for shuffling money and devising new ways to create pointless work to make citizens temporarily comfortable? Isn’t this what we told by the mainstream economists would see our streets paved with proverbial gold? Surely this is proof!
    The much vaunted service economy is now in maturation where GDP is bolting ahead filling the skyrockets of the global elite while the plebs’ national income share reverses down a cliff. So the only answer to be found is to give even more corporate welfare to the elite so we can squabble over the scraps they throw into the crowd when it suits them. Any work requiring sweat on the brow is filled by imported slaves so citizens can attend sporting festivals, which are far more important than participating in making physical products people want to buy. The politik tell us not to worry because the economic glass is still half full – gulp!

    We could draw comparisons with pre-revolutionary economies where the host eventually is devoured by the elite minority who ponder what happened when the barbarians are storming the gates. We are stoopid.

  35. Let’s put aside the big-picture angst. H&H has identified an important trend. Get ahead of the curve….the next big thing must be Kopi Luwak. So, Long Civets! Plenty of rainforest in QLD for them to breed, Barnaby should be all for it.

  36. Well the inner city west had been gentrified so I don’t know how typical it is. If you want to find people trying to look busy try JB Hifi. Plenty of movie hipsters walking around doing practically nothing. Only the cashiers and the invariably Indian security dude do anything.

    • I suppose anything less than $1M in Sydney is “affordable” these days, even if it is only a dogbox. And who needs a car when a carpark would cost another $200K or whatever it is?

      Absolutely ridiculous, I agree, and it would be good if nobody actually bought the said dogbox at such a lofty price. But unfortunately, there will be a speculator who buys it, hoping to double his/her money in a few years when s/he sells it to some even greater fool. And if we keep going on the same trajectory, it will be $1.5M very soon, though it looks like the music will be stopping in the apartment market in the not too distant future. In Melbourne, it’s already stopping.

      • I’m currently reading a book (Manias, panics and crashes, a history of financial crisis).. My worry is that this bubble has more to go given the “right” circumstances. Japan went much more in that direction and ultimately the crash was epic. Potentially, we could see a further doubling from today’s prices and we won’t be even close to where Japan was..

  37. haroldusMEMBER

    Luckily the comments make up for it.

    Edit: meant to be in response to Jacob’s juvenile images comment.

    Screen focus shenanigans!

  38. Badger
    You put your finger right on the problem of how the hell we invest in an insane world.

  39. haroldusMEMBER

    This must be a record number of comments for a non-weekend post.

    Maybe it’s the word “anus”?

    Anyway, what’s the beaker of water for? Is a “long macchiato” meant to be equiv to a flat white? (ie weak coffee not diluted by milk minimal froth)?

    A latte would be 1 shot and fill up with not-scalded milk.

    I was actually a barista when it was a drudge job! Stupidly I went back to uni.

    Edit: Macchiato from memory meant stain which was just like a couple of drops of milk to take the edge off a short black. That looks like way too much milk proportionally.

    Sorry to be a coffee nerd. Since I gave up smoking and being a barista I have gone from over 10 sb a day to one Aldi pod a week if I’m feeling especially daring. Hanging out to vape tho but my missus is not delighted with those plans.

  40. haroldusMEMBER

    FFS I’m only here because there’s no ASX at the close or weekend links.

    Carmmmmonnnnn.