Stunning breakdown. The Portnoy scrabble bag anecdote captures everything in one absurd moment, when random selection outperformed professional analysis it basically proved the system had decoupled from fundamentals. I've watched this disconnect widen since 2020, and the thing that gets me is how many smart people are still pretending the old valution frameworks matter. Reality and the simulation diverged, and we're only starting to reckon with what that means for actual capital preservation.
Great article, thanks. Describes so well where we are and the path.
Seems like 2008 was a big turning point where it no longer made sense to be financially conservative. You might recall discussions of moral hazard, people walking away from houses / mortgages they bought in speculation, with pretty much zero consequences.
And while I have no doubt politicians have been enriching themselves on the backs of the American people for a long time, it is truly astonishing to see the current level of grift in the wide open with no attempt to conceal. Makes one wonder - how much longer will it be tolerated? Surely there must be a breaking point.
Also, to be clear this comment is *not* equivalent to the point we made in this essay: "Of course currency and ownership are just collective ideas. Always have been. Always can be broken by the individual's use of force."
Even granting your premise that property and currency are merely social constructs (itself debatable), the "always have been breakable" objection still misses the point. The distinction isn't between "unbreakable" and "breakable" but between dormant threat, degrees of threat, and active breakdown.
Yes, governments have always possessed the power to confiscate—but there's a categorical difference between that latent capacity and officials openly declaring homeownership "failed policy" while advocating to "impoverish the middle class". That property can be seized is self-evident. But there is diagnostic value in documenting the coordinated, accelerating transition from norms that constrained such seizures to their normalization and implementation--as well as how we arrived at this point. Investors dismissing this as "nothing new" because the theoretical possibility always existed are like homeowners ignoring smoke because houses were always combustible—technically true, catastrophically irrelevant.
I think the premise is rock solid as far as the past 3,000 years of human history goes, but I didn't come to argue.
My question was what can we do. The abstraction of "being like water" across different strategic waves is sound, and also a bit like saying "if you discern properly you'll achieve wisdom." A tautology that doesn't help the people attempting to navigate.
It's impractical to ask you to tell people to "buy gold or small cap equities" for example, but there is no reduced-to-practice playbook you've given people.
That was my point about out to see with no compass. Not saying it wont' come, just that it isn't here.
In some ways shattering illusions without a new destination leads to misery for those not doing the leading.
Well, ignorance is no doubt bliss, but 1)"Reality is that which, when you stop believing in it, doesn't go away" and 2) we've begun laying out the framework for how we solve for it here: https://bewaterltd.com/p/investing-in-the-age-of-multiflation
Great article, but what is the solution for average ppl? Crypto is now just a leveraged beta play of liquidity so not a "fluid asset". We can't keep cash since it is being debased and inflated away. What are fluid assets we can buy now? Even gold and silver are being manipulated by the central banks. Or we are pretty much screwed unless we are sons or daughters of Trump, Musk, Bezos, Altman, etc.?
Two turning points that changed our society. One, supreme court rulings which said money is free speech, which gave the wealthy inordinate power in effecting elections and buying politicians. Two, the rise of social media and their drive to maximize ad revenue and eyeballs by appealing to the worst of human nature, fear / anger, even though it destroys the national social fabric dividing the nation into us vs them
Never has so much been written, using such long words, to say so little.
There is a valid argument to be made that many of the figures used by economists are failing to capture economic reality. The way to make that argument is not with this anti-scientific rejection of any use of metrics at all. If you do that, the only thing you end up saying, however many words you write and however long or obscure those words are, is "everything sucks".
Think you missed the point of the essay and the series it is part of.
You also appear to be confusing science with scientism. Believing that complex human action can be reduced to physics-like formulas and captured in statistics is not scientific rigor; it is what Hayek called the 'fatal conceit.'
Our argument is not an 'anti-scientific rejection of metrics,' but a rejection of the 'pretence of knowledge' that claims these broken models are more real than the territory they fail to map--and are increasingly demolishing.
See F.A. Hayek's Nobel Prize lecture, The Pretence of Knowledge
There is no one claiming GDP or inflation or poverty line figures are more real than... what, the economy? Reality? It's a meaningless point. It's one set of shadows on the wall (typical economic metrics) versus another (ones own anecdotal experience, and that of their friends and online peers, and depending on who you ask, maybe consumer sentiment surveys too).
I think if you want to make the case that all of the economic metrics are broken, you should give reasoning and non-anecdotal evidence, and I'll probably agree with a lot of what you say. This is what Green did, although as many have pointed out, quite poorly. (And these people were quite right to - regarding this as the priesthood declaring heresy rather than the scientific method of hypothesis and disproof is exactly what I mean when I call your viewpoint anti-scientific.) If you cannot do that, you are just another old man yelling at clouds, so to speak.
Happy to discuss once you have actually read Hayek, Mises, and the rest of our series. You are arguing with a strawman. If that amuses you, by all means keep at it—but we have better uses of our time.
Follow the MONEY. Gold and Silver are finally exerting their indomitable will on the market because they cannot be conjured or printed. They will enforce discipline on a market run by grifters, fraudsters and conmen.
please can you explain these sentences in more detail "The era of investing primarily for ‘Return on Capital’ has ended. The primary objective must now be ‘Return of Capital’—quite literally." Seems of vital importance and I would love to understand more
Many thanks. Would be interested in thoughts on this https://www.balancedeconomy.org/latest/big-financial-power-global-warming Its core argument is that today’s dominant financial system is structurally extractive. It prioritises short-term returns, concentrates ownership and control, and in doing so actively blocks outcomes that are good for the planet and for communities.
Stunning breakdown. The Portnoy scrabble bag anecdote captures everything in one absurd moment, when random selection outperformed professional analysis it basically proved the system had decoupled from fundamentals. I've watched this disconnect widen since 2020, and the thing that gets me is how many smart people are still pretending the old valution frameworks matter. Reality and the simulation diverged, and we're only starting to reckon with what that means for actual capital preservation.
Very interesting. I came over from Michael Green's substack. Well worth the trip;)
Great article, thanks. Describes so well where we are and the path.
Seems like 2008 was a big turning point where it no longer made sense to be financially conservative. You might recall discussions of moral hazard, people walking away from houses / mortgages they bought in speculation, with pretty much zero consequences.
And while I have no doubt politicians have been enriching themselves on the backs of the American people for a long time, it is truly astonishing to see the current level of grift in the wide open with no attempt to conceal. Makes one wonder - how much longer will it be tolerated? Surely there must be a breaking point.
Interesting times we live in.
Thank you for this.
Lovely read. May I ask how much of it was written using AI? :)
0
The scope is ambitious, but there's no edge here unfortunately.
Of course currency and ownership are just collective ideas. Always have been. Always can be broken by the individual's use of force.
I struggle to see how any one can 'be water' in the environment.
Unfortunately the flows have been shaped by billions of dollars worth of machines and algorithms upstream.
You've set people out to sea with no functional compass on how to navigate back to land.
Also, to be clear this comment is *not* equivalent to the point we made in this essay: "Of course currency and ownership are just collective ideas. Always have been. Always can be broken by the individual's use of force."
Even granting your premise that property and currency are merely social constructs (itself debatable), the "always have been breakable" objection still misses the point. The distinction isn't between "unbreakable" and "breakable" but between dormant threat, degrees of threat, and active breakdown.
Yes, governments have always possessed the power to confiscate—but there's a categorical difference between that latent capacity and officials openly declaring homeownership "failed policy" while advocating to "impoverish the middle class". That property can be seized is self-evident. But there is diagnostic value in documenting the coordinated, accelerating transition from norms that constrained such seizures to their normalization and implementation--as well as how we arrived at this point. Investors dismissing this as "nothing new" because the theoretical possibility always existed are like homeowners ignoring smoke because houses were always combustible—technically true, catastrophically irrelevant.
I think the premise is rock solid as far as the past 3,000 years of human history goes, but I didn't come to argue.
My question was what can we do. The abstraction of "being like water" across different strategic waves is sound, and also a bit like saying "if you discern properly you'll achieve wisdom." A tautology that doesn't help the people attempting to navigate.
It's impractical to ask you to tell people to "buy gold or small cap equities" for example, but there is no reduced-to-practice playbook you've given people.
That was my point about out to see with no compass. Not saying it wont' come, just that it isn't here.
In some ways shattering illusions without a new destination leads to misery for those not doing the leading.
Well, ignorance is no doubt bliss, but 1)"Reality is that which, when you stop believing in it, doesn't go away" and 2) we've begun laying out the framework for how we solve for it here: https://bewaterltd.com/p/investing-in-the-age-of-multiflation
Can start here and more to come. https://bewaterltd.com/p/investing-in-the-age-of-multiflation
Great article, but what is the solution for average ppl? Crypto is now just a leveraged beta play of liquidity so not a "fluid asset". We can't keep cash since it is being debased and inflated away. What are fluid assets we can buy now? Even gold and silver are being manipulated by the central banks. Or we are pretty much screwed unless we are sons or daughters of Trump, Musk, Bezos, Altman, etc.?
https://bewaterltd.com/p/investing-in-the-age-of-multiflation
Two turning points that changed our society. One, supreme court rulings which said money is free speech, which gave the wealthy inordinate power in effecting elections and buying politicians. Two, the rise of social media and their drive to maximize ad revenue and eyeballs by appealing to the worst of human nature, fear / anger, even though it destroys the national social fabric dividing the nation into us vs them
https://www.youtube.com/watch?v=8cN2orF88Jg&t=1328s We are here NOW
Sprott and Horizon Kinetics Inflation Beneficiaries?
Never has so much been written, using such long words, to say so little.
There is a valid argument to be made that many of the figures used by economists are failing to capture economic reality. The way to make that argument is not with this anti-scientific rejection of any use of metrics at all. If you do that, the only thing you end up saying, however many words you write and however long or obscure those words are, is "everything sucks".
Think you missed the point of the essay and the series it is part of.
You also appear to be confusing science with scientism. Believing that complex human action can be reduced to physics-like formulas and captured in statistics is not scientific rigor; it is what Hayek called the 'fatal conceit.'
Our argument is not an 'anti-scientific rejection of metrics,' but a rejection of the 'pretence of knowledge' that claims these broken models are more real than the territory they fail to map--and are increasingly demolishing.
See F.A. Hayek's Nobel Prize lecture, The Pretence of Knowledge
https://www.nobelprize.org/prizes/economic-sciences/1974/hayek/lecture/
There is no one claiming GDP or inflation or poverty line figures are more real than... what, the economy? Reality? It's a meaningless point. It's one set of shadows on the wall (typical economic metrics) versus another (ones own anecdotal experience, and that of their friends and online peers, and depending on who you ask, maybe consumer sentiment surveys too).
I think if you want to make the case that all of the economic metrics are broken, you should give reasoning and non-anecdotal evidence, and I'll probably agree with a lot of what you say. This is what Green did, although as many have pointed out, quite poorly. (And these people were quite right to - regarding this as the priesthood declaring heresy rather than the scientific method of hypothesis and disproof is exactly what I mean when I call your viewpoint anti-scientific.) If you cannot do that, you are just another old man yelling at clouds, so to speak.
Happy to discuss once you have actually read Hayek, Mises, and the rest of our series. You are arguing with a strawman. If that amuses you, by all means keep at it—but we have better uses of our time.
Follow the MONEY. Gold and Silver are finally exerting their indomitable will on the market because they cannot be conjured or printed. They will enforce discipline on a market run by grifters, fraudsters and conmen.
Yes Sir! Nice work 🤔
How do I process this?
God is a good God.
The Universe is a friendly place.
I create my own reality/economy/beliefs!
please can you explain these sentences in more detail "The era of investing primarily for ‘Return on Capital’ has ended. The primary objective must now be ‘Return of Capital’—quite literally." Seems of vital importance and I would love to understand more
https://bewaterltd.com/p/enter-multiflation
https://bewaterltd.com/p/investing-in-the-age-of-multiflation
https://bewaterltd.com/p/navigating-multiflation
Many thanks. Would be interested in thoughts on this https://www.balancedeconomy.org/latest/big-financial-power-global-warming Its core argument is that today’s dominant financial system is structurally extractive. It prioritises short-term returns, concentrates ownership and control, and in doing so actively blocks outcomes that are good for the planet and for communities.
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