Category: Current Affairs

The Great Turnings

Andy Yee

As Vladimir Lenin said, there are decades where nothing happens, and there are weeks where decades happen. What makes our times particularly turbulent is that we are simultaneously at the late stages and transitional moments of three big cycles:

  • Carlota Perez’s technological revolutions / financial capital cycle (50-60 years)
  • Strauss–Howe generational cycle (80-100 years)
  • Ray Dalio’s empire / reserve currency cycle (200 years)

If you don’t understand these cycles and how they interact with each other, you can’t understand what’s coming at you. Collectively, they explain the U.S.-China strategic rivalry, the clash over Hong Kong, political extremism across the world, and the rise of Bitcoin. It is in moments of greatest danger like ours where once-in-a-lifetime opportunities lie.

The Beginning of the End

Andy Yee

Camus

The other day I was reading Albert Camus’ classic The Rebel. His exposition of Nietzsche’s philosophy pretty much sums up my state of mind amidst these turbulent times – think in terms of an apocalypse to come, not in order to extol it, but in order to avoid it and transform it into a renaissance.

To borrow observations from crypto thought leaders Nic Carter and Ryan Selkis, the past week has seen the world gradually coming to terms with the reality that the next decade will look incredibly bleak. The coronavirus, while not the Black Swan in itself, is going to bring our already fragile systems – deep distrust in governments, overstretched monetary policy, and social polarizations – on the brink of collapse.

But like Ryan Selkis, I remain optimistic and excited, not because people are suffering, but because crisis brings opportunity to revamp broken systems. In the coming months and years, we will only see more dysfunctional monetary stimulus and financial turmoil. For me, I’m going to stay even more committed to Bitcoin and crypto, as decentralized finance is our best bet to a more ethical, resilient, and self-empowering post-crisis future.

Is Bitcoin a Technology or Ideology?

Andy Yee

To accurately characterise Bitcoin and predict its trajectory in the decade ahead, it helps to revisit the message embedded in its genesis block: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”.

Bitcoin kicked off the blockchain revolution and became a poster child of fintech. Over time, it is regarded as a monetary technology for its value as sound money. Eventually, people will realise that it is the most promising Dissident Tech of our time. This occurs in the context of the enormous social problems and inequalities created by the Cantillon Effects of unprecedented global liquidity – a redistribution from the poor to the rich.

In other words, Bitcoin is a technological breakthrough, but it is first and foremost a political and ideological movement.

Martin Luther and Satoshi Nakamoto

Andy Yee

October 31 is a day celebrated around the world in many different cultures. It originates from the ancient Celtic spiritual tradition of Samhain, and has always been a symbol of death and renewal. It turns out that history is filled with landmark events on this date which propel human civilization forward.

On October 31, 1517, Martin Luther nailed his Ninety-Five Theses onto the door of All Saints’ Church in Wittenberg, criticizing the indulgences of the Roman Catholic Church. It started the Reformation which would later lead to the separation of Church and State. Exactly 11 years ago, on October 31, 2008, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list, challenging the authority of central banks and their monetary policy abuses.

History will look back on the Bitcoin whitepaper as the beginning of the separation of Money and State. For all libertarians and sovereign individuals, myself included, it is an aspiration worth striving for.

The Free Trade Hypocrisy

Andy Yee

It is a very common clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him. In this lies the secret of the cosmopolitical doctrine of Adam Smith, and of the cosmopolitical tendencies of his great contemporary William Pitt, and of all his successors in the British Government administrations.

Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness, to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth.

When Friedrich List wrote these paragraphs in The National System of Political Economy in the 19th century, the U.S. was a newly industrializing nation. Today, it is at the pinnacle of technological achievements. Here are the hard truths about national economic development: climbing your way up requires unorthodox tools; staying on top takes hypocrisy to deny latecomers those very same tools.

The Birth of Tragedy

Andy Yee

gibbon

Charlie Chaplin said, “Life is a tragedy when seen in close-up, but a comedy in long-shot.”

Reading chapters from Gibbon’s Decline and Fall, and Trump’s press conference, you will conclude that a nation’s decline is the reverse – it is a close-up comedy and long-shot tragedy. Trump has turned White House into reality comedy shows.

The Spirit of 1776 vs. The Spirit of 2016

Andy Yee

the-spirit-of-76

The Spirit of 1776, by Archibald Willard, represents the zeitgeist of the American Revolution. It refers to the attitude of self-determination and individual liberty. The Spirit of 2016, by David Parkins for The Economist, typifies the global sentiment following the election of Donald Trump as US president. It is an unsettling zest for tribalism and authoritarianism.

The Anglo-Russian Rivalry

Andy Yee

It’s sad to see how much the Anglo-Russian rivalry has degraded. It used to be about the Eastern Question over the Ottoman Empire, the Great Game in Central Asia, the Cambridge Spy Ring. Today it’s about the respective countries’ hooligans rioting in football games during Euro 2016. We live in a mediocre age.

The Political Logic of China’s GDP Growth Target

Andy Yee

I’m a political analyst, not an economist. But in many situations, it’s more than enough for me to understand the logic behind the Chinese economy.

As an important example: in the March 2016 National People’s Congress session, why did Xi Jinping set 6.5% as the GDP growth target for the next 5 years?

This number has nothing to do with economics. It’s all about politics and the logic is as follows:

  1. In October 2015, the Fifth Plenum of the 18th Central Committee set itself the ambition of doubling the 2010 GDP by 2021.
  2. Why 2021? Because it is the 100th anniversary of the founding of the Chinese Communist Party (CCP). Doubling the GDP so that China becomes a “moderately well-off society” will fulfill one of the “two centenary goals” of the CCP, very key to sustaining its legitimacy.
  3. Take a look at the realized GDP growth rates for the past 5 years: 2011-9.5%; 2012-7.8%; 2013-7.7%; 2014-7.3%; 2015-6.9%.
  4. If the average growth rate for the next 5 years from 2016 to 2020 is 6.5%, the 2021 GDP will be exactly double that of 2010. Mathematically: (1+9.5%)*(1+7.8%)*(1+7.7%)*(1+7.3%)*(1+6.9%)*(1+6.5%)^5=2.