Ataraxia Financial Newsletter - August 2023
A Controversial Viewpoint on Imaginary Lines in the Sand and the Sovereign Individual
Of all the strange realities that man has imagined into existence throughout the ages, political borders must surely rank up there as among the most incredible.
— Joel Bowman
Friday, September 1st., Bangkok.
Hello from Bangkok. It is the rainy season in Thailand, which basically means that at some point in the afternoon there will be a cluster of dark clouds suddenly taking shape on the sky, which gives you — in my experience — about 30-60 minutes to find shelter (I haven’t always been successful to do so 🥹), until it pours down crazily for a few minutes, followed by a bit of dribbling until the sky clears up again.
Nothing too interesting was going on in the markets last month… Nvidia up, the S&P down, inflation notched up again a few BPs, the VIX “fear index” remains low and Putin was able to, or just lucky — we don’t know, to get rid of one of his most recent adversaries… nothing particularly exciting, just the common news we are used to, mixed up with the typical claptrap around it.
Like the clouds above the Benchakitti park, everything just seems to be lining up for the next big blast.
Here are the numbers for the month:
That gives us some time to ponder about a different topic… nation states borders.
Borders of Sovereign States Vs. Sovereign Individuals
In the 21st century, the daily news stories are filled with headlines of what country A did to country B, on what side country C is and what country D should do about the action of country E and so forth.
There are many things in our lives, that we can influence, but our birthplace is not one of them. I think most people would agree that each individual should have the same rights and independently make their own choices about one’s life. The place of birth should not be a determining factor. However, in reality it makes a huge difference and it is one of the main sources for misunderstandings and conflicts.
Hence, I totally agree with Joel Bowman, when he says that borders must be among the most “incredible” concepts that man has come up with.
Here is the full quote:
Of all the strange realities that man has imagined into existence throughout the ages, political borders must surely rank up there as among the most incredible.
Along these borders man will march, in lockstep to the bars of one or another national anthem, military standard pointed to the heavens, rifle firmly in hand, at the ready to wound and even kill whoever decides to trespass on his preferred political perforation.
Considering the world as it exists before us – with its immense natural borders, for millennia impassable, its looming mountain ranges and raging oceans, its vast deserts of sand and snow – who would conclude that, at the end of the long day, a grand network of political borders, designed to partition one group from the next, to corral them into competing tax farms/ nation states, more often at odds with each other than not, would constitute the geopolitical blueprint recipe for peace and prosperity on the planet?
While almost everyone will agree on the concept of equal basic rights of everyone regardless of where they were born, most people are not able to apply this concept consistently in their thinking.
Regardless of whether it comes to politics, sports or other cultural differences, most people end up (maybe subconsciously) favoring the agenda, team or opinion of the country in which imaginary borders they were born in.
Expressions like:
“WE won the World Cup!”
→ Well, in reality, 11 people, none of which the person talking has ever met in reality have won the competition.“Russians are aggressive, look what THEY are doing in Ukraine!”
→ Well, I don’t know… I met a couple of Russians, all of them were quite nice to hang around and none of them seemed aggressive…“WE should stop importing so much from China!”
→ Well, everyone can decide how to spend their money… if YOU are going shopping, YOU make the choice. YOU don’t need to buy this great new electronic device, most of its components are probably produced in China. That way YOU can contribute to lowering the import statistics if that’s really that important to YOU.“WE should raise the tariffs on agriculture to protect OUR farmers!”
→ Well, my friend lives over in France, just about 20km away, I like buying his apples, they are delicious! Should I really buy the grab that some German farmer who I don’t even know produces?
…and all of that just because of imaginary lines determined by some historical events and the military power of nation states.
Even with my vast experience of spending extended periods in totally different parts of the world, I am amazed and I have to admit that it is quite impressive, how somehow the governments around the globe are always successful in brainwashing their populations to an extent, so that they feel attached or proud of and/or rout for any particular country they happen to be born in.
A few months ago I was reading "The Sovereign Individual: Mastering the Transition to the Information Age". This book was written by James Dale Davidson and Lord William Rees-Mogg and it was originally published back in 1997.
While we can say that they did not get everything right in their predictions, a lot of the things they foresaw did actually materialize, and their main thesis is unfolding around us. It is tremendously impressive how well today’s world reflects the dynamics that they were describing and expecting to play out more than 25 years ago. Further, I was quite intrigued by their analysis and reasoning for their future predictions. No question, the book is a highly recommended read.
The fundamental thesis is that the Information Age is fundamentally transforming the traditional structures of power and authority. More precisely it argues that the advancements in technology will enable people and corporations to become more independent and circumvent political and geographical restrictions posed on them by the nation state.
Here are some basic key points that I think are important:
The Decline of the Nation-State: The authors predict that the power of traditional nation-states will wane as individuals and businesses become more mobile and can easily relocate to jurisdictions that offer better economic and political conditions. This mobility will enable people to seek out favorable tax environments and escape onerous regulations.
The Rise of Cryptocurrency: The book discusses the potential of digital currencies, such as Bitcoin, to provide individuals with financial autonomy and privacy. Cryptocurrencies enable individuals to bypass traditional banking and governmental controls.
Personal Empowerment: The Information Age empowers individuals by giving them access to vast amounts of information and opportunities for entrepreneurship and self-reliance.
Increased Security Concerns: While the Information Age offers many benefits, it also raises concerns about privacy and security. There are challenges of maintaining personal security in a world where information is easily accessible.
A New Social Contract: Individuals will need to take more responsibility for their own well-being and security, leading to the emergence of new social and economic structures.
I think there is no disagreement that a lot of these points have already become a reality. The most controversial one is the decline of the nation state, which hasn’t really occurred yet. On the contrary, I would actually argue that nation states have ballooned and have become way more powerful and invasive over recent decades.
However, I think we are seeing the cracks everywhere around us. By now, most people are aware that all governments basically consist of a bunch of unethical people, who will lie and do everything to gain and maintain power. This is manifested by polls showing declining trust and support for any politician in power. Moreover, it is also one reason why we see populist movements rising everywhere across western democracies.
Furthermore, it seems to become more and more obvious that the parasitic state apparatus is no longer able to deliver betterment to most people. States were able to deliver services and subsidies by secretly taxing their citizens through running deficits financed by central banks. But as inflation has been rising, it becomes more and more obvious to people that their standard of living is declining as a consequence of inflation. As more people do their own research and realize that inflation is a direct consequence of money printing, which in turn is a consequence of government deficits and therefore a “hidden tax”, they will become even more enraged of the ruling class in power.
In other words, the parasite (state) has grown too big. It has squeezed and exhausted the capabilities of its host (the productive part of the economy), that it relies on.
Finally, while most people have heard it and know that it is probably a problem in the future, I think almost nobody is seriously concerned, or aware of its potential consequences — the massive debt burden!
We are already seeing that more and more people are opting out and using the technological advancements of the Information Age to their advantage to live a live as sovereign individuals who are not beholden to any government. As the situation becomes more dire and young people become aware and evaluate their options, I assume this trend will accelerate.
Thus, I am convinced that the authors are right and we will see a substantial decline in the nation state in one way or another. How long will it take for it to transpire? Well, that’s the big question. We are trying to connect all the dots as best as we can to make the best rational decisions along the way.
Unfortunately, history makes clear that governments never step down voluntarily. I assume that governments around the world will become more aggressive and pervasive in the years ahead, as they see their power wane. I reckon that we are gonna see more restrictions, burdens and capital controls which the elites are trying to enforce upon their subjects in order to try maintaining their power.
Fortunately, states are also in competition among each other and individuals are empowered by technological advancements like Bitcoin, messaging encryption and vast information through the internet, enough to circumvent onerous restrictions, outsmart the state and become sovereign individuals.
My hope is, that at some point we can just forget about these stupid imaginary borders and just live together in harmony as sovereign citizens of planet earth — different in talents, appearance and desires, but equal in rights and the freedom to make our own choices.
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Best regards,
Disclaimer: The content of this newsletter is for informational and educational purposes only. It contains my personal views and opinions, which are not to be taken as direct investment advise. All investments have risks and you should do your own due diligence before making any investment decision. If you require individualized advice, to review your unique situation and make a tailored advice for you, then contact a certified financial planner or other dedicated professionals.
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