Monday, July 24, 2017

When the Obvious is not really that Obvious

 I was just browsing the interwebs lately and I stumbled upon this interesting quote:

Talent is hitting a target that no one else can hit.

Genius is hitting a target that no one else can see.

Now, that got me thinking.

I have quite a lot of smart friends. In fact, I feel that compared to some of them, they are operating on a whole different level of intelligence and brain processing speed. Like seriously.

I could understand each individual action. I could also understand how the sequence of each action relates to the other actions.

However, what I couldn't understand was how he was executing actions, updating the sequences, and re-calibrating all in real-time to optimize the output. What looked like a problem that would require of me at least minutes, if not hours of thought, was being done by him as just another everyday thought process and action, almost effortlessly. It was unreal. But it was real.

I had always thought of myself as a smart person, but after this experience that I had in university, I realized that there are plenty of people that exist in this world who are way smarter than me, operating on a whole different level.

I would never be about to beat these people outright. They could get things done faster and better than me. How could I beat someone with such talent? And most of them also have more resources too.

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Ever since I became a gold bug a few years ago, I have struggled to understand why no one else can see what I see.

Am I wrong? Delusional? Is this really stupid? Am I dumb or something? 

But what I have come to realize is that nobody bothers to even look at it to form an opinion for themselves.

To reach the conclusion doesn't require years of studying. Probably just a few weeks at most, or within a day if you realize the importance and urgency of such knowledge and hit the most important points first and work your way down. If anybody bothered to take a look and understand it for themselves, the conclusion is blatantly obvious. Slap-in-your-face obvious. But no one looks and no one cares.

The global monetary system is broken. Period. Any argument defending that always precipitates to "the government won't allow it". You know, kind of like how the French government didn't allow the revolution.

Oh wait, hold on. Nobody gave a shit about that government? They all got beheaded? Oh yeah. Well, I guess you can trust every government except the French government then. /sarc

My point: If your only argument is "faith" in your government, or worse, in the governments of other countries, then that is not a very strong argument, in my humble opinion.

As long as this shell/shill game continues and fiat money is still useful as a currency, I will keep on playing this game. What am I to do? Buy food at the hawker centre with silver coins? 

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After stumbling back into cryptos for the 3rd time, it finally stuck with me this time.

A system that not only operates on distrusts, but is stronger and more robust when people distrust each other. Every distrust requires more proof and verification and it makes the system that much stronger and tamper proof.

A system that is so distributed that no single party can exert authority on the rest of the participants. 

A system where holding nothing means you hold nothing, holding part of the system gives you utility, but holding everything makes it worthless. Where value comes from distribution and usage, not from hoarding and scarcity. What's the point of money if no one has else has it or is willing to use it as a medium of exchange?

It is a system that survives on mutual distrust and decentralization. Where all the players agree to be bounded by certain rules.

Not happy? Want to create your own rules? Fork from bitcoin and make AnyhowCoin. But unless you get other participants to join your game and agree by your rules, it is worthless.

Cryptos can survive because people have decided that they rather be bounded by these fixed rules, rather than the ever changing goalposts and standards set up by governments and central banks that could turn on a dime. 

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Things are slowly changing. You CAN buy goods and services with precious metals. You also CAN purchase things with cryptocurrencies as well. Technology has bridged the gap to make these kind of things possible.

There are a few companies that issue precious metals backed debit cards (not credit). There are now a variety of companies coming up with ways to have crypto-backed debit cards as well. I've mentioned TenX before, but there is also Monaco, Tokencard, Metal and Plutus. 

The next possible big thing is paying with precious-metals backed cryptocurrencies through debit cards. It sounds almost ridiculous to say, but I believe that this mix and the final outcome is a better solution to fiat money.

A lot of people are confused and skeptical by gold-backed crypto or currency. Yet they don't see the hypocrisy of faith-backed fiat.

Of the few things that I can realistically see happening in the near future, a gigantic financial shit storm regarding the reduced value of government and faith-backed money and a need to find a better currency is something that I am quite certain of.

It is definitely not going to be a single moment where people just flip on a switch and everyone starts using the new system. It will happen in waves, as more and more people realize that having big stacks of monopoly money doesn't mean much.

People should not be forced to use shitty money where some unknown party can expand or contract the money supply with no oversight and no punishment. We're basically ending the beta testing phase of this new form of money soon, with 0.01% of the world's population already giving it a go for the past 9 years. 

Of course, the people who dared to get in early will be the ones who benefit the most. Fortune favours the brave, not the risk-adverse. The early adopters, not the herd of sheep. The hardworking who bother to learn, to understand and to try and to fail, not the lazy who want to be spoon-fed a the perfect, bug-free, government-approved product that is "safe" for all.

The fundamental movement into crypto is not a f-you to the government merely because it is a government. It is an f-you to any and every government for being shitty fiduciaries of people's money.

If they can't do it properly, then the people will.

But fine, I'll play this game as long as fiat money is worth something. It is not my preferred choice, but that's the best course of action at this point of time. I already have my exit strategies all planned out.

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Now back to my story about all those super intelligent people that I've met. To big banks with prop trading departments and millions of dollars of that their disposal. To hedge funds with insider connections. To everyone smarter than me and with more resources than me.

I don't have to beat them by competing with them to hit their targets.

I get to beat them by hitting the target that they didn't even bother to look for or understand.

Yes I realize that it seems like I am implying that I am a genius, but I can assure you that I am not. I am just a lot more skeptical and contrarian than most. So far, that has been my only edge in the market and it has served me well. This is just the extended application of it outside the tiny world of SGX stocks.

Disclaimer, in case it was not obvious enough, I have positions in both precious metals and cryptocurrencies. Why both? Well, why not?

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