Life is full of paradoxes:

Life is full of paradoxes.

A paradox is a self-contradictory statement or a statement that runs counter to one’s expectations.

There’s a few that I love.

Life is short and life is long.

Time feels like it speeds up as you grow older, yet your life could be over at any moment. The future is entirely uncertain. You could live another 50 years or die tomorrow. No one knows. Your time is limited, yet you could have many decades left in your life.

You are perfect as is yet you’re imperfect.

You are enough but constantly a work in progress. Evolving and growing every day. We chase this idea of perfection but it doesn’t exist. As the Japanese like to say, everything is imperfect.

One paradox I’m battling with a lot these days is what happens in the next few years.

We’re going to go through an economic crisis that could be significantly worse than 2008 due to the short squeeze of meme stocks bankrupting hedge funds, family offices, and market makers crashing the stock market.

Personally, I cannot wait. I will have seen history and written about it before it happened. I’ll make a ton of money on the way and my legacy will be cemented no matter what else I accomplish in my life.

Yet I’m terrified. I’m scared of what’s to come. Predicting market crashes is not a nice feeling.

I was rewatching the Big Short today and there’s a scene towards the end of the movie where Brad Pitt’s character talks about what happens when a market crashes.

People lose jobs, they lose houses, they lose healthcare, they lose the ability to provide for themselves and their family, largely because of circumstances outside of their control.

All because those in power were illegally trying to bankrupt companies through naked short selling. The problem these days is everything is connected.

2008 was a great example of that. The mortgage crisis eventually hurt the banks because they invented new ways to make money through CDOs and synthetic CDOs. An event in one part of the economy can have ripple effects across the world.

Many famous investors have talked about how we’re in an everything bubble. Digital rocks are selling for 600k. Companies with no product revenue had larger market caps than the largest car companies in the world.

When you look at history, this has happened many times before and always ends badly.

So I’m super excited for the event to happen because I’ll hopefully be able to retire, but terrified of how it will affect billions of people around the world.

The inequality gap has gotten way too high and if/when this happens, there will be revolutions around the world, especially if those in power who caused these crises aren’t punished.

Iceland jailed bankers in 2008 because of what they did to their economy, yet the rest of the world sent 1 person to jail. Why? Because Wall Street controls the money flows.

Due to the Greenspan put in the 1980s, bankers continue to take more and more risk knowing full well they’ll be backstopped by the government. It was Long term capital management in the late 90s, then the banks got bailed out in 2008, setting a terrible precedent.

There’s a concept in economics called moral hazard where entities take on more and more risk because they don’t bear the full cost of the risk. Banks can continue to invest in risky assets because they know if they fail, they’ll be bailed out by the government.

I’m scared that if that happens again, there will be a global revolution, especially on the back of Covid when all these entities made trillions of dollars in the last few years. If the Fed does allow banks to fail, then we go into a period that rivals the great depression which would create a ton of geo-political instability across the world, similar to the 1930s.

No matter what the central banks do, they’re screwed. They have to pick their poison because there’s no ideal scenario. My take is you have to let banks fail, put people in prison and completely reform the system because we cannot allow this fraud to continue.

Yes it will be brutal for a few years, but we can get through it as a society.

If you pick the other option by bailing out the banks, you allow them to continue their fraudulent system where wealth gets hoarded by the top 1% while the rest of the world suffers. You also ruin the US dollar because you hyperinflate the currency, something which the US should not want. It also sets a terrible precedent around the world because it means that greed and fraud wins out.

We can’t have that as a functioning society.

I believe in the power of humanity and our ability to get through crises. We haven’t had one for over a decade but we will get through it. Difficult times make people, not easy times. There will be revolutionary ideas that come out of this, similar to Bitcoin appearing in 2009 after the last crisis.

So you can believe that America is screwed yet the world is such an exciting place with tons of innovation happening.

It’s ok to believe ideas that are contradictory to each other.

As F. Scott Fitzgerald said ‘the test of first rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.’

Life is full of paradoxes and understanding both sides of an argument is only going to help you going forward.