The Ouroboros // Variant Perception #18

One of my best trades ever was going long Eurodollar futures into year-end, 2019. It’s a risky trade. Far more risky than buying stocks. The bet is that interest rates on US dollars were going fall hard and fast.

The reason I went into this bet (which is a rather risky trade because of the leverage used) was that I was seeing multiple people from a diverse set of backgrounds signaling that the economy was slowing, interest rates were going to fall, and that this specific trade was the best way to play it. While each person used a different perspective and body of work, they each came to the same conclusion.

It ended up paying off huge at the end of 2019 and then even better as the COVID panic drove interest rates to zero.

Seeing how multiple, accomplished people all came to a similar conclusion based on different perspectives gave me the confidence to jump into this trade. A trade that I normally would never do because of the higher risk profile.

Finding these unique set ups, where people from disparate areas of expertise come to the same conclusion, is one of my best “high signal” indicators. Bonus points if the observation also includes people from different periods of history.

I bring this up because I’m seeing another “high signal” conclusion right now. Over the last 6-7 years there has been a collection of diverse experts sharing work that leads to the same conclusion, America is going through a massive season of change. Even though their lens’ through which they see the world are different, these experts identify the 2020s as a period of upheaval, change, and, most importantly, rebirth.

I know this might not be a radical conclusion for many people. We feel the rising tension and the gears of progress clenching, however, I have two main points.

1) Everything moves in cycles. The tides of the ocean, human hormones, the economy, everything. Cycles are an inescapable reality of the universe. We’re born, we mature, we age, we die, we’re born again. Everything is constantly in flux.

It’s no different for human culture, our institutions, our technology, and society. The signal that’s flashing red on the dashboard today is that we’re at the end of a cycle. The turbulent period where the institutions and way of being that brought us to where we are today begins to collapse under its own weight, not able to prosper in the culture that it ultimately made possible.

Our current location in the cycle is marked by death and decay. It’s important to note that death in this sense is not final. It means transformation, like a caterpillar in a chrysalis.

2) The political, social, and economic tension we’re all witnessing is a natural symptom that happens during the “changing of the guard” when one cycle ends and a new cycle begins. These times all share similar events and characteristics such as inflation (check), economic uncertainty (check), political polarization (check), geopolitical tensions (check), and, quite interesting, political opponents questioning the validity of election results (mega check!).

Whether you follow Neil Howe’s The Fourth Turning, Ray Dalio’s Principles for Dealing with the Changing World Order, or a new book I’ve just come across The Storm Before the Calm by George Friedman all of them point to the 2020s being a time of fundamental change (using different work).

The weight of progress breaks the institutions that birthed that same progress. The open space that the new culture filled carries our institutions and social fabric to new and unfamiliar lands. This is when things break. The world that created the progress no longer has the correct tools or incentives to continue that progress.

Which leaves it up to the next generations to take up the mantle of progress and reconstitute new institutions with new values that better represent current realities.

According to Friedman’s Storm Before the Calm, we’re currently leaving the post-Reagan “institutional” cycle and the “Age of Information” socioeconomic cycle.

Reagan Era (early 1980s - early 2000s): Ronald Reagan's presidency marked a shift towards deregulation and an increase in government spending. This cycle saw significant changes in the tax code, deregulation of industries, the end of the Cold War, and massive favor to corporations.

Information Age Cycle (1980s - 2030): This cycle has been marked by technological advancement, especially in information technology, which has profoundly changed the economy and society. The rise of the internet and digital technologies has influenced almost every aspect of life, from how businesses operate to social interaction.

With the “Age of Information” we’re starting to see how the internet has fundamentally shifted the way the world works. How quickly information moves and how the internet influences culture. Most importantly, during this time, the American economy has become heavily focused on finance and technology while shipping out manufacturing overseas, especially to China.

Massive wealth has been created for the educated, upper class, asset holders while the middle and lower middle-class (who traditionally worked in manufacturing and industry) have seen their earnings remain largely flat (inflation-adjusted) while opportunity declined and prices ticked up each year.

That dynamic is perfectly represented by the 2016 election of Trump vs Hillary. It’s the rust belt vs the coastal elites. Add to this other symptoms of the socioeconomic and institutional cycle failing us. Depression, addiction, loneliness, anxiety are all spiking higher. Life expectancy in America has moved lower the last two years (led by drug overdoses and covid). College is more a scheme to make money for student loan lenders than to prepare graduates for the economy. Housing has become too expensive. The list goes on and on.

My argument is that none of this shows the failure of America has a concept or a country. It shows our place in the cycle of progress.

Then, from the institutional cycle perspective, our leadership needs to come to terms with new and changing aspects of how to manage the American empire (and empire we are).

The Reagan policies of increasing military spending, deregulating, lowering taxes, and the support of corporations has run its course. We’ve had the longest, least-effective, and most expensive war in US history (Afghanistan). We have a bloated Federal budget that only ever grows. Corporations hold far too much power in our government through lobbying. We have socialized losses for the wealthy with “too big to fail” banks. Bureaucracy and the power of unelected leaders has risen to become far too unbalanced.

Not only this, we have large existential questions that need answering such as how do we manage the rise of China, illegal immigration, the rise of automation, and more.

To everyone who believes this is the end, here is my message. We’re not falling into a black hole where culture, progress, and technology goes over the event horizon to never come back again (all the doom porn, illuminati, WEF runs the world naysayers). We’re digesting change that needs to occur to better reflect where the last cycle has brought us and the new realities that need managing.

It’s all part of a natural process that ebbs and flows like the seasons.

So, what’s my guess on how all of this ends up?

I believe AI, automation, technology, and people will be at the forefront of the next socioeconomic cycle. This next period of time has the potential to be a golden age for creativity, productivity, and wealth creation. However, it will also be a major driver of unrest and uncertainty in this decade as jobs get automated away.

I can see this next cycle being the “Exponential Age of Human Progress” cycle where the convergence of multiple technologies all come together creating free energy, rapid global travel, expanded life expectancy, and a radically different future and perspective on what it means to be human.

I hope and believe that a new focus on fulfillment and an improvement in the human experience will rise out of this cycle. With the last cycles focused on corporations and how to create the most profitable company maybe this cycle people will take the forefront. The focus moves to creating a more fulfilling life. I mean, what’s the point of being wealthy if you’re not also happy?

From the institutional side, we must embrace accountability. Our government must be held accountable for the self-dealing, corruption, and ineffectiveness that’s arisen as corporate money has captured policy. We’re in desperate need of a solution to this problem.

I imagine independent thinkers will be emphasized over institutional experts. We can already start to see this with the rise of Substack and Twitter and the downfall of more traditional media companies (CNN, Fox Media, Vice, etc). People do not trust the incentives of corporations as they’re motivated (by their fiduciary duty) by profit than by truth.

There’s a necessity for trust to be built back into media and government, and I imagine that will be at the center of the next institutional cycle.

The part I don’t have much certainty around is how America’s identity will shift during this time. However, my hope is we shift the focus out of wars and military conflicts and towards economic prosperity, supporting entrepreneurship, and lifting up people and countries out of poverty.

Using our resources for that will have an exponentially higher return than any war of the last 50 years.

One of my favorite ancient mystical symbols is the ouroboros. It’s depicted by a snake or a dragon eating its own tail. It represents many things but most importantly it represents the infinite, inescapable reality of how cycles turn.

We’re inside of the most difficult part of the cycle right now and it could last many more years. However, this is the period where the foundation of the next cycle gets set. The actions we take, the decisions we make, and the values we stand for make up the raw materials of the next cycle.

-Jared