Change We Can Believe In

Quite the gallery eh? What could I have titled it? "2020" might be apt.

Black lives matter. Fridays for future. Gilets jaunes (Yellow Vest Movement). Lockdowns. Vaccines. Vaccine Passports. Work from home. Bitcoin. Wallstreetbets.

These phrases have become almost household in the recent past, yet they are all relatively new. They might seem to have little in common on first glance, but disparate they are not. Scratch a little underneath the surface, and you quickly notice that they share a strong thread that runs through all of them. "Change!", and not just of the pedestrian variety.

Source: cdn.history.com

The yearning for it has been brewing just beneath the surface for some years now. Senator Barack Obama recognised the collective mood in 2008, expertly capitalising on it in his election campaign. It seems he was not able to use his 2 terms to enact the change that the people yearned for. In 2016, the United States ushered in another leader that had a somewhat different style and tone, promising to satiate the ever more painful hunger pangs for change.

Obama and Trump might seem to have little in common on first glance, but yet again, disparate they are not.

"Change we can believe in." "Make America great again." Are they both not rallying cries around the central idea that something currently is wrong? Obama appealed to a better future. Trump harkened to America's golden past. Both of them did not bask in the present. They knew the electorate was not able to accept the current state of affairs, so they had to promise an alternative reality. If anything, Trump promised more urgency for 'reform' or radical change. The problem was getting evermore acute, and Donald promised to up the dosage. This time, the electorate only allowed him a single term.

So how about the next iteration of leadership? Joe Biden is promising to "Build back better". I cannot ascertain to the national mood, or faith and trust in his leadership at this point in April 2021. However, I do not believe he has too much time before the zeitgeist hungry for change starts to manifest itself once again.

Source: usa.streetsblog.org

As faith in underlying institutions continue to erode, those in leadership are faced with an ever increasing urgency to act, since trust equals power in many aspects. Either act to revive the faith and trust of the electorate, or lose it permanently to entropy. According to the second law of thermodynamics, the entropy of a system can only decrease if the entropy of another system increases. Can we spread the chaos elsewhere to save this system, or do we simply migrate to another system?

Bitcoin and Socialism are both becoming more in vogue. Although one promises decentralisation and the other requiring ever more authority, both offer up the allure of order, an antidote to chaos.

The rise of the many movements listed above are symptoms and signposts that entropy in the current system is rising. Chaos and disorder is building like pot on the boil, and the leaders are at a loss as to how the heat should be lowered. Unfortunately, I believe we are at a point in time where measures to mitigate discontent will not remove disorder, but simply transfer it to another variable in the system's equation.

Sooner of later, everyone sits down to a banquet of consequences - Robert Louis Stevenson

Financially, social democracies are tapped out. They cannot increase taxation meaningfully, and they are faced with weaker demand from foreigners for their debt. They are also facing declining productivity through an aging population and the burden of promised entitlements. What are they to do to provide bread, circuses and better infrastructure/education/business environment/healthcare/equality/fight climate change/defend the world from bad guys etc etc? From the great CNN themselves:

We often use the phrase "a loss in trust". I would put forward that often, trust is not lost, it merely seeks a new home. A safer home. A more fundamental home. This is a worrying trend, and one that is not easily reversed.

What happens when the man stops providing enough protection? A rifle is bought and placed above the bed.

What happens when working two jobs isn't enough to put food on the table? A brick gets thrown at glass shopfronts and what is needed is taken.

What happens when those in power promise masks are not needed, then mandates that we all wear one? That only a couple of weeks is needed to flatten the curve and here we are 14 months later. Or that the closing of borders isn't 'right' only to do it after it is too late? A switch goes off, and a decision is made to question the authorities.

What happens when nations keep writing cheques even though they are functionally bankrupt? A robinhood, coinbase or goldmoney account is started.

Trust in the higher ups, in our systems, in our institutions morph into trusting more and more in ourselves. I won't go into all the details as to the effect of such a shift in sentiment. I will say however, that during times of upheaval, items that are both durable and valuable through time are sought after.

There are many things that fulfil both criteria, but I myself am squirrelling away my savings into equity in "Lindy" companies, Gold, Silver, Bitcoin, Commodities and personal skills/knowledge. These are all things that are in shorter supply than government promises (and by extension digital fiat currencies). As my partner puts it, an inflection point is imminent, and we want to be well positioned for it.

Disclosure: None of this is financial advice. This is merely the musings of a keen observer of the chaos that is unfolding before us.