But I logged on and wrote this much so it’s not a failure. I can’t think of a topic that interests me enough.
In “The Black Swan” by Nassim Nicolas Taleb he talks of Black Swans, a term that encompasses things which are unseen, unpredictable, and have huge impacts. The book covers a wide array of fallacies we humans get tricked into by our brain that simply can’t handle complex systems and it is forced to simplify.
The name Black Swan originates from a old belief (before Western discovery and habitation of Australia) that all swans are white. You can say this as much as you would like, reinforce your observation with thousands of observations of only white swans and firmly believe it is a sound conclusion. The problem is all it takes is a single observation to prove it wrong. It turns out there are black swans and they live in Australia. Absence of evidence is not evidence of absence.
Taleb later describes Black Swan events as ones that have a disproportionate impact. You can make 1000 iterations of a phone each one more meaningless than the next, but slap a touch screen on it with an intuitive interface and you’ve created something entirely different. Something that changes society and has an infinitely bigger impact than the previous 1000 iterations of phones. Unfortunately, it is a folly to trying predicting black swans. There is a reason their impact is so significant and that is partly because nobody sees them coming.
What filter can you apply to look forward in time? There isn’t one, but you can test things for fragility to see if they are durable or not, to see if they will persist in the future.
A topic of “Anti-fragile”, does the object in question gain from volatility and stress or does it suffer harm from it? A porcelain cup for example, we place it on the desk and apply enough small stresses to it then it will eventually break, it has no ability to recover and it is incapable of sealing up it’s cracks stronger than they were before. Compare this to the human body, have a male pick up 40kg of weigh one week, then 45kg the next week and continue this until he is picking up 120kg. In this case applying stress makes the man stronger, his bone density increases, his muscle mass increases, his hormones increase and he feels better as a result. If somethings gains from volatility then it is likely to improve and survive. If it suffers harm from volatility then it is certain to collapse on longer enough timescales.
Saudi Arabia relies heavily on the export of oil products to finance it’s government, I believe 85%+ of their exports are this category. Currently the Kingdom is on hard times due to the decreased demand in oil and a fall in the price to a third of what it once was. As automobiles get more efficient and drilling technologies unlock ever more quantities of oil, what happens to Saudi Arabia if the demand for oil drops 5%? Civil unrest? Defaults? War? The Kingdom of Saudi Arabia is very fragile.
Next lets look at the education system in the US. Massive student loans backed by government taxpayers that yield degrees that are questionable in their value. What makes this system fragile? Primo, the lenders are not exposed to the risk of defaults, the taxpayer is. Remember the last time bankers were not exposed to their own risk, 2007-08? Whenever downside risk is shifted to a 3rd party it is dangerous and unethical. Imagine the default rate spikes up, bailouts here we come.
Worse, imagine the value of a US education spikes down which it is currently doing. This is much more dangerous because as you have fewer people paying into the system universities are forced to downsize. You can see at University of Missouri after a series of Black Lives Matter protests, how buildings get shuttered, staff gets laid off and enrollment shrinks. What follows that? Likely further drops in enrollment, a feedback loop that results in the collapse of a school. As universities become more and more politicized by banning speakers, racially segregating the campus, and hosting riots they run an increasing risk of destroying their university. Administration can stop this and they likely will in most cases but the damage will be done and enrollment will fall.
Another place I see fragility is with currency. We’ve used many forms of currency and trading before. We’ve used it as a store of value, as a way to settle debts, pay for brides, compensation for injury, and to buy and sell things. We’ve used shells, beads, ignots of metal, sacks of grain, vials of olive oil, coins, gold, gold backed paper, real estate backed paper, and most recently as of 50 years ago, simply paper. We don’t buy groceries with shells anymore so that fact right there should give you a hint that maybe paper currency won’t last forever either. So why is paper currency fragile?
Most obviously it is made from fragile materials, it can’t be duplicated, backed up or preserved. It’s also fragile because it is centralized, only one group of people can create more of it. That same group of people benefit from printing currency so we have conflict of interest too. Other problems we have is our current form of currency is not convenient, banks are open when people work, they close when people finish work. Wires and transfers can take up to 5 business days, and it costs time and money to process those transfers. The supply of money can vary and can be inflated or deflated at will, that might sound like a good thing because you can achieve price stability, but nature doesn’t care much for stability. Money can be tracked by banks and thus by government. Traveling with large sums of money leaves you vulnerable to robbery, confiscation, and subject to customs and import limits.
Now we have hundreds possible thousands of forms of alternative online currencies popping up online. Each one with different features, specialties and abilities. Some promise anonymity, others a fixed amount of coins, some can be “mined” like gold, but all seem to share that they are easily and freely transferable. I think these could have the potential to bring about a new shift in currency. Let me repeat, these could BRING ABOUT a shift in currency. I don’t think these are the new currency, but I think they will open new features that people never had access to with the money. Free instant transfers, banking without the hassle of a bank, anonymity are all features absent from our money currently. Like most things in life you don’t know what you’re missing until you have it. The current iterations of online currency are not user friendly and will fail for that reason as well.
So why aren’t these new inventions of internet money the way of the future. Because of the rules of a Black Swan, you don’t see them coming. If you see it coming it is not a Black Swan. Online currencies have a market cap 112 billion, thousands of companies are jumping into this space and so are regular people. These are not the characteristics of a Black Swan, but of a bubble that is about to inflate.
My prediction going forward, online currencies get huge this year. If they survive until the end of the year their growth will force governments to intervene, demand tax information, hunt down revenue (that supports terrorist or other lame excuses). We’ll see a small collapse in online currencies, and a lot of people will lose a lot of money. But this is going to be akin to bit torrent where there is so many currencies that governments can’t possibly nail them all down and they’ll be forced to legitimize some, either directly or though lax enforcement.
It is possible that private industry could be the ones to legitimize the online currencies, but certainly not in the US where industry fears government so much. The first places to legitimize will be somewhere in Asia almost certainly and they are likely to profit handsomely from doing so.
Over the past week my wife and I have been picking out blackberries from a patch of briers along our neighbors fence line. We got a bunch and made two black berry cobblers to give to our neighbors and then froze a bunch to use in cereal and yogurt. We used all those frozen ones and more fresh ones recently to make blackberry jam.
Blackberry jam is not hard to make, however it does require a big time commitment but it is worth it. Gathering the berries alone takes a while and it will leave you with scraps from briers up and down your arms. Over the past week we gathered around 24 cups of berries, which may seem like a lot, but after you smash them and remove seeds 18 cups of berries becomes about 8 cups of blackberry juice. That 8 cups when combined with sugar and pectin yielded us about 6 jars of jam, and it is lovely. We all agree the blackberry jam is our favorite by a long shot. We’ve tried strawberry jam, carrot jam, and blackberry jam.
When picking the berries it is important to avoid ones that aren’t completely black, shiny, and swollen. If you pick those they will be too sour to eat raw, but it’s nothing a bowl full of sugary cereal or cane sugar can’t fix. The ones that are fully black, shiny, and swollen are absolutely delectable. They are also difficult to find because once the berries reach this point they will fall off the plant with the slightest touch and the berries will remain lost under the briers forever.
Foraging for food is a topic that interests me, I think it’s a valuable skill that we (humanity) don’t want to lose. If you ever want to get an idea of the disconnect from nature and food that is coming to the rest of the world look toward the US. People are disconnected from their food and have no idea where it comes from. It seems like it’s the result of a developed society that over time we neglect our bare necessities and forget how to satisfy them. There is a lot of grandmother knowledge that risks being victims to modernity, the internet and the unlimited access of information (much of it dubious, unlike your grandmother’s 70 year old habits).
Read one hour daily.
Write one hour daily.
Train one hour daily.
I’ve begun reading again, and it’s something I really enjoy. Being able to self-learn and teach yourself seems to be the most valuable skill set one can possess. I’ve read many of Nassim Taleb’s books on randomness, probability, and fragility and they’ve really opened my eyes to how the world works. Even though I learn a great deal from these books it is incredibility difficult to add these tools, and ways of thinking into my daily life. While the techniques might be difficult to apply the books have sparked an interest in classical knowledge.
Epigrams, axioms, aphorisms are able to convey valuable knowledge in a compact and brief format especially have piqued my interest as of late. I keep a copy of Taleb’s Procrustean Bed in my bathroom and make a habit of reading a few everyday, often something will stick with me and I’ll mull it over for a few weeks. Each one bringing a new realization with it.
The English have Mediterranean weather at random times; but they go to Spain because their free hours are deterministic & rigid
Don’t sound like great system, does it?
There are several aphorisms that hint at the dangers of efficiency as a primary objective. The quest for more efficiency saps the fun out of hobbies and activities. In business it often sacrifices redundancy and stability causing things to blow up. (Remember that next time you are delayed at the airport for hours over a computer glitch) .
Another aphorism I’d like to apply to my life is that, if no heuristic, or a rule of thumb, exist on a topic, then don’t do it. Basically, follow rules of thumb, grandmother’s advice, knowledge from the classics and other forms of knowledge that have already been tested by time to ensure that they do not cause harm.
I found the Trifecta listed at the beginning of this blog on Twitter, and I thought, “there we go, that is an easy heuristic I can apply.” I’ve done physical training, but stopped and plan to start up again soon. I’ve written blog posts, but also stopped with little intention of starting again, and I currently spend free time reading books/web. Why not try all three at once?
So here I am, attempting to write my first hour and satisfy the requirements of my recently adopted Trifecta. I’m not certain it will yield any benefits, but the harm in trying is insignificant. I plan to keep writing and focus on topics that interest me.