My Tao - Yin and Yang

The Tao doesn't deal in absolutes. There's a silver lining to everything bad, and there's a dark side to everything good. This is symbolized with Yin and Yang, two seemingly opposites that are in reality complimentary forces. Neither Yin nor Yang can exist without the contrast of the other.

Implicit in this thinking is the idea that there's no strength without weakness, and there's no weakness without strength. We must therefore look at our strengths and weaknesses with a mix of hope and suspicion. I am for instance inclined towards laziness. I'm also quick to jump to conclusions. Jokingly, I refer to these as my strong points, and in a way I'm right. My determination to do as little as possible sparks creative and strategic thinking that helps me position myself favorably in the currents of the Tao. My tendency to jump to conclusions is similarly helpful in that I quickly pick up on anomalies. Whenever my conclusions differ from that of experts, I'm either onto something interesting or in need of education. Either way, I might want to reconsider my positions after looking into the anomalies in greater details.

This is distinct from Judeo-Christian doctrine that frequently deals in absolutes. Jews and Christians have an all powerful God, and a constantly scheming and evil devil. These are distinct entities. They do not appear at first sight to be anything but sworn enemies to each other. However, on closer inspection, we see that the two are closely related. God is never so powerful as to completely eradicate evil, and the devil is never so successful as to ever replace God. They exist in a yin-yang relationship.

Seen in this light, the stories about God and his relationship to the devil become easier to understand. God is in fact the all mighty Tao. He represents the relentless power of nature in all its forms. Satan is God's smartest, most well spoken and charismatic arch angel. He represents human aspirations towards perfection. Satan wants to become God by being smarter than God. However, this is impossible. There's no way to do better than God. All we can do is to live sensibly within the confines of nature. We cannot live beyond nature without getting ourselves into a terrible mess. If we follow Satan's advice, we end up in hell. Physically and emotionally, things fall apart if we try to defy God, and that's why Satan was kicked out of God's court.

Satan is not a sadistic evildoer. He doesn't boil and torment human souls for fun. He's merely of the opinion that he can do better than God, and it's in this perspective that we can identify him in both our own thinking and in the rhetoric of others. Whenever we hear ourselves thinking that we can do better than everybody else, that we are smarter than others, more deserving than others, better than others, we are hearing the voice of Satan. The same applies to politicians who claim that they can suspend the laws of economics. Only Satan makes such suggestions, and we have to keep away from such thinking for our own good, because this kind of advice leads directly to hell in the form of depression, envy, anger and anxiety.

The story about Satan and his relationship with God is a warning to all clever people. It's also a warning to people who blindly trust demagogues that promise something for nothing. While being clever and charming is a strength, being too clever is a curse. There's simply no way around the Tao. While we can position ourselves favorably in its great current, and take advantages of its force, we can never do better than what is already provided. That's why the wise treat nature with due respect. The wise know that the power of the Tao will crush anyone that tries to oppose it.

By Gregory Maxwell - From File:Yin yang.png, converted to SVG by Gregory Maxwell., Public Domain, Link

My Tao - Ego

Both Erik and Idar fell victim to their own egos. Greed and vanity combined into a toxic mix that made them do things they must have understood to be hopelessly irresponsible. However, it's a mistake to conclude from this that our ego is our enemy. Rather, ego must be seen as as a force that we must tame and learn to use to our advantage.

First thing to recognize is that ego is as much a part of us as an arm or a leg. It cannot be removed or suppressed without grave danger. This is because ego is the part of us that prompts us to act. Without it we would become empty shells, easily manipulated into subservience to others.

The problem with ego is not its existence but its childish nature. It's always looking for immediate gratifications, attention and admiration. Ego loves to be stoked and nurtured, and resents any kind of obstacle or difficulty in obtaining such goodies.

Left unchecked, ego will spur us onto impulsive behavior. It will blind us to reality. It will constantly tell us that we are special, that we are entitled, that we are smart and lucky and very much deserving of all the riches in the world. It will make us angry and envious of other people's success, and it will never rest. No matter how successful we become, ego will always want more.

An untamed ego opens the way for a life in perpetual misery. Ego's impulsive nature will put us eternally at the brink of disaster. Always hungry for more, and always convinced of imminent success, an untamed ego will make us take on way more risk than we should. Yet, no amount of success will ever make us happy, and disaster is virtually guaranteed at some point.

A well tamed ego, on the other hand, forms the backbone of lasting success. What separates Tao masters from miserable opportunists is not a lack of ego. Rather, it's about quality. Tao masters show a great deal of discipline and restraint. They know when to engage their ego, and when to keep it at bay.

Ego knows what we want, and acts in this way as our compass. It will eagerly tell us what we "deserve" in life. It is therefore essential to engage ego in a structured "conversation" early in any enterprise. We must force ego to enumerate its desires. Let it lay out a vision of the future, complete with material and immaterial goals. Such visions should come with pictures and images of all kinds. A single postcard image of a sunset over a sandy beach will not do. A proper vision has to be detailed. It has to reflect who we really are.

I'm personally an introvert and not much of a materialist. I like the idea of a nice big house. But my material longings stop at that. I mostly desire a happy family life with a loving wife and healthy children. Beyond that, I desire plenty of freedom to do whatever I want to do. I have absolutely no desire for colleagues or office work. My desire for social success beyond a happy family is limited to a wish to be seen as clever and wise. By and large, I just want to be left alone.

Other people are miserable without a wide social circle. Others again love the idea of fancy cars, fine furniture, clothes etc. That's all fine. There's nothing wrong in being a materialist or a social creature. We are all different. We all have our particular sets of desires. The key to success is not to suppress or ignore any of this. There's no happiness in being a monk, unless that's precisely what we want. What we need for success is awareness, and a plan to go with that awareness.

Our plan must in turn be predicated on an understanding of natural forces and society at large. Otherwise, we're ill equipped to position ourselves correctly in the great scheme of things. Without knowledge, we have no way to know when to bank our profits. Furthermore, we must show discipline. Once we catch a current, we must keep a steady hand on the wheel of our ship. While doing this, we must suppress any childish impulse to cash out early or take on additional risk. Ego must be kept firmly under control, because ego is not a strategic thinker. Ego is a dreamer. Its proper role is to create visions of success. However, ego should never be let in charge of our ship. For that we have reason, prudence and wisdom.

By primaire [1] et secondaire (Wikipédia anglais) [2], Public Domain, Link

My Tao - The Genius Fool

Few people have ever caught the swelling of a Tao wave quite as perfectly as Idar. Not only did he managed to get into a trend at the very start, he also exited at the very peak. Idar realized the enormous potential in what was at the time a brand new technology, namely the cell phone. As a skilled salesman, he developed a marketing strategy and a business model that fully exploited this potential.

In less than ten years, Idar went from being an average run of the mill salesman, to one of the riches individuals in Norway. When he cashed out, he received enough money for himself and his family to live in luxury for generations to come. All he needed to do was to put everything into a well balanced portfolio of shares, real-estate and gold, and this was exactly what he started off doing.

Idar bought a beautiful seafront house in Spain, took his wife and five children with him, and set about building a luxurious and relaxed environment for them all to enjoy. However, Idar soon became impatient. He wanted to achieve more in life. He was after all a genius. That was plain to see. One look at his bank account confirmed this, and his name was frequently in the news, always in some way related to his enormous success. There was no denying that he was smarter than just about anyone, and it was a shame to let all that talent go to waste.

Pretty soon, Idar started looking into the various business proposals he was constantly receiving from people eager to hook up with him. Some of it had merit, so the idea grew on him that he should become an active stakeholder in upstarts. This seemed right an proper, given his experience as a successful entrepreneur. However, Idar overlooked a crucial point.  His success had nothing to do with investing. He started a company that he sold years later. Apart from negotiating a few loans, his success was entirely due to his skills as a sales man.

As an investor, Idar was a complete disaster. He bought and sold shares way too often. He jumped onto trends near tops, sold close to bottoms, and generally roamed around in the venture capital market like a headless chicken. When asked about his positions by an accountant some three years later, Idar had to admit that he didn't know the exact details. All he had was a general feeling that things weren't too rosy.

After some digging around, Idar's accountant could inform him that he was in fact in debt. His entire fortune was gone, and the only way out was to declare bankruptcy. Idar had gone from hero to zero in three short years, a feat even more spectacular than his stellar rise to fame and fortune.

It must have occurred to Idar more than a few times on his way downhill that he was in fact clueless, and therefore much better off stopping what he was doing. Yet, he kept digging his hole deeper and deeper, something that's surprisingly common to see, especially among people with a great sense of personal worth. Their egos get in the way of clear thinking. They cannot fully comprehend the fact that they aren't as skilled at what they are doing as they have led themselves to believe. A sense of entitlement makes it appear logical to them that they must at some point hit jackpot. Instead of stopping their misguided activities, they double down in the hope and firm belief that good luck will make everything turn out fine in the end.

By Kristoferb at English Wikipedia, CC BY-SA 3.0, Link

Jockeying for Position

Trading in futures has a lot in common with horse racing. It's all about clever maneuvering until right before the finish line. In the vast majority of races, the winner is only marginally better than a handful of other favorites. However, every now and again, there's a real upset with a completely unexpected winner passing the finish line with a sizable margin. That's when things change. Fortunes are made and lost. Odds have to be recalculated. The value of the horses reassessed.

Right until the final seconds of the race, the riders are merely jockeying for position. The great majority of participants are completely unaware of the upset that's about to happen. However, in retrospect, it may be quite clear why things unfolded the way they did. Things may have been changing in the way horses have been trained. A talented jockey may have appeared in the shadows. Those who paid attention to the developments outside the racing track might have known about an imminent upset, and positioned themselves accordingly.

This is similar to what happened on April 20, when the May futures for oil expired. Right up until the very last hours of trading, everything seemed normal. But then, all of a sudden, the price of May contracts went negative. Prices went from 20 dollars to minus 40 dollars, and countless speculators in long positions went bust, while the shorts made an absolute killing.

In retrospect, what happened makes perfect sense. With nowhere to store oil, anyone caught long in these contracts will have to find alternative storage space by April 30. Truckloads of oil will be delivered at the door of contract holders, and they better have ready storage space, or they will be faced with the cost of renting the trucks. There will be fines and fees.

The speculators now holding long contracts, with only days to find storage space, were for some reason ignoring the evidence that was plain to see for everyone involved. They failed to make the connection between what they were doing and the physical reality of the world. Otherwise, they would never have taken on the long contracts in the first place. The problem was that they had become accustomed to thinking of the jockeying as being the entirety of the game. They were so used to rolling over contracts from one month to another that they had forgotten the fine print about oil being delivered to their door unless alternative storage can be found.

This disconnect between futures trading and the underlying reality of things is so widespread that many other markets are likely to see similar upsets in the months ahead. The world has changed, and those who haven't fully understood this are likely to be caught wrong footed.

The gold market is likely to blow up in a similar fashion to what we saw with oil. The only difference being that it will be the shorts who will be caught off guard. When May contracts for gold expire on the April 30, many longs will demand delivery. This is because the world is becoming increasingly uncertain. The risk averse will therefore seek the protection of physical gold. That means that anyone who's short gold, but not in possession of physical gold, may be asked to find this gold on April 30. It will be similar to the oil trucks showing up at the door of oil longs on that same date, but with the big difference being that someone, possibly with a Russian accent, will be asking about his physical gold delivery.

It remains to be seen what happens as we get closer to the expiry date of the May gold contracts. Nothing out of the usual may happen. However, it could also be that the shorts panic in the very last hours of trading, sending gold up several multiples from the current price. If that happens, chances are that the June and July contracts will go up too. Because once there's a general awareness about gold being in short supply, prices will not only have to move higher, they must remain high in order to entice owners of physical gold to sell.

By Noah Salzman - Own work, CC BY-SA 4.0, Link

The Significance of Sharply Lower Oil Prices

The price of oil delivered in May went negative on the last day of trading in this contract. The reason for this is that the contracts require holders to take delivery, and with nowhere to store the oil, traders were desperate to get out of their positions. While this is generally well understood, the full significance is not.

Many see the sharply lower oil prices as a mere curiosity. Others draw the conclusion that all things will be cheaper because low oil prices will translate into lower costs of production. Few, if any, make the observation that this will translate into sharply higher prices for consumer goods, and sharply lower prices for the means of production. Hardly anyone is worried about hyper-stagflation, but that's where we're going.

Oil prices are not lower due to increased efficiencies. They are lower due to disruptions in the supply chain. Consumer goods are no longer being produced in quantities anywhere near what they used to. This is what's driving the price of oil down. It's also what's going to drive the price of consumer goods higher, because there will be shortages. The bizarre situation will arise where companies and farmers go bankrupt at the very same time that the cost of consumer goods skyrocket.

By Wilfredor - Own work, CC0, Link

My Tao - The Heir and His Inheritance

Erik was one of a dozen inheritors to a substantial fortune. The company that he and his family had owned for three generations was sold, and the money distributed among the owners. The family had managed to negotiate a good price, so each inheritor was practically rolling in the dough. However, none of them knew very well what to do with the money they now had deposited into their bank accounts.

Most of the inheritors promptly allocated most of the inherited money into stocks of various kinds. But Erik had other plans. All his life, he had been feeling let down by his family for being too stingy. Many of Erik's friends lived far more extravagant lives than him and his family despite being substantially less rich. Clearly, his family had been way too conservative. To prove this point, Erik bought a big house with a beautiful view of Oslo, an indoor swimming pool, and a tennis court in the garden. The rest of his money was invested into race horses and luxury cruise ships. He also poured some money into upstart technology companies. He was no expert in any of this, but that was not the point. All these things stroked his ego, and that was all that mattered. He could finally impress his friends with a grand house, race horses, and luxury suites on cruise ships. He could also talk casually about technology stocks.

Erik was at once the man about town. He was the guy with the fancy cars, the beautiful wife, and the edgy yet classy lifestyle. However, with not a single one of his investments making any money, he soon had to borrow money to keep up his lifestyle. But that was not a problem, because he had plenty of valuables he could post as security. Besides, with several technology companies in his portfolio, he was bound to strike gold with one of them pretty soon. The same with his race horses and his cruise ship investments. Sooner or later, there would be a winner.

But there were no winners. His horses never won a race. The cruise ship he had invested so heavily in went bankrupt, and the cost of keeping up his mansion remained a permanent drain. Three years after he received his inheritance in ready cash, Erik filed for bankruptcy.

The rest of Erik's family didn't fare quite as badly. But not a single one of them managed to do better than the company they sold. Despite having negotiated a good price, five years on, every one of the inheritors were worse off than if they had remained in control of the company.

The family as a whole were completely unprepared for the life that necessarily comes with moving one's fortune from a solid investment and into ready cash. They had no idea what they were doing. They never read any practical guide to investing. They simply assumed that success was in their blood. Bashing about in the great current of the Tao, they never caught a single wave. They simply moved hither and thither, without any great success anywhere.

By Doug Antczak Baker Institute for Animal Health College of Veterinary Medicine Cornell University - http://www.genome.gov/pressDisplay.cfm?photoID=20008, Public Domain, Link

My Tao - The River and the Sawmill

Truls and his son Mads were masters of the Tao. They probably never thought of it that way, but that's besides the point. Being a Tao master doesn't require awareness of this. It's all defined by the actions taken, not by the label. What made these two people masters of the Tao was the way they positioned themselves in relation to the natural forces surrounding them and the society at large.

Truls and Mads traded in lumber and planks in Halden, a small port town in Norway, situated at the estuary of the river Glomma. The way this worked was that lumber and planks were transported downriver to Halden from the great inland forests. Merchants like Truls and Mads would then buy these products, and make a profit by exporting this to the rest of Europe.

Landowners could either dump lumber directly into the river, and have it float down to Halden, or they could produce planks, put the planks on barges, and have the planks delivered to the merchants. By far the cheapest mode of transportation was to float lumber. But customers in Europe demanded planks.

There was a great premium to be made by processing lumber before export. Landowners were therefore encouraged to produced planks. Everywhere along the river, there were small sawmills, powered by local creeks. These were primitive little things, with a single blade, all put together by local craftsmen using local materials.

The production of planks was inefficient, and the transportation cost was high. Yet the demand for plans was such that it nevertheless made sense. It was at the time the best arrangement possible. But that all changed when Truls and Mads came up with an idea of their own. Halden has a low and wide waterfall, and the two men could not help thinking it possible to have a sawmill powered by it. If so, they could produce planks themselves. They could buy cheap lumber and sell it with great profits as planks.

The problem with their idea was that the waterfall was way too powerful. Any sawmill would have to be put at a safe distance from the waterfall. A ditch would have to be cut to siphon off some water, and the net result would be a timid little production of a few planks. The profits from such an enterprise would be meager at best. However, the idea was so compelling that they decided to study it in more details.

The more they looked into it, the more awestruck they were by the sheer power of the waterfall. It was thousands of times more powerful than any creek. If they could only find a way to harness this energy, they could set up hundreds of blades, cutting more lumber into planks in a day than all the upstream sawmills did in weeks.

The two men gathered pamphlets and magazines from their German trading partners. They were particularly interested in the latest and greatest in saw and energy technology. Soon, it became clear that a giant sawmill might be possible, provided it was made in stone and brick, and powered with steal turbines rather than wheels of wood.

Finally, they made their big move. They bought the waterfall, and contracted German engineers to build their sawmill. In parallel, they talked to landowners upstream, asking them for lumber rather than planks. By offering a better price for lumber than any of their competitors, they cornered the market. They also put a halt to the upstream sawmills, because the higher price for lumber made cutting and transporting planks unprofitable.

The sawmill in Halden was nothing short of a revolution. Landowners were suddenly making more money at greatly reduced effort, and the merchants in Europe got cheaper planks from Truls and Mads than they could get anywhere else. European trade in planks was suddenly dominated by the father and son team. They become immensely rich.

It should be noted that their success was not due to any great physical effort on their side. Rather, it was all due to their understanding of natural forces, engineering, and the mechanisms of trade and commerce. They positioned themselves perfectly. Then, they acted out their plan in a manner that defines true Tao masters.

By Onno Zweers - Own work, CC BY-SA 3.0, Link

Undetected Flu Cases

To start with, everyone in Portugal who had been in contact with someone with the Wuhan flu were tested. There were cases of perfectly healthy people going into hospital for observation. As the numbers of confirmed cases increased, more and more people were told to stay at home and report back if they felt worse. These cases were noted down as possible, but not confirmed, cases. As the number of confirmed cases continued to rise, even more people remained untested.

The number of untested people relative to tested and confirmed cases has in other words grown. To start with, hardly anyone went untested. Now that we are nearing 20,000 cases, the vast majority of actual cases is likely to be untested. Adding to this that a very large percentage display no symptoms, we get an explanation for why the curve has flattened way beyond what social distancing could be expected to do on its own. The curve is simply not as flat as it appears.

The number of cases went up by a tenfold every week until social distancing was imposed. After that, it took two weeks to tenfold once more. However, at this point it looks like we will not get another tenfold at all even though the official cases are a tiny fraction of the population. Based on the official cases, there cannot possibly be any herd immunity, so why is the curve flattening as if we have already reached the peak?

The most likely answer to this is that the virus has in fact peaked, and that a mere fraction of the people affected have been so ill as to seek help. A recent study in Boston seems to confirm this suspicion. When all the occupants of a homeless shelter were tested for the Wuhan flu, half of them tested positive. Yet not a single one had any symptoms.

It appears then that the Wuhan flu is both more widespread than official figures would suggest, and a lot less dangerous. Homeless people are not exactly known for their robust health, so the fact that not a single one was showing any symptoms is encouraging. If we do not soon see a sudden deterioration in the health of asymptomatic individuals, we can conclude that the virus is generally harmless, and only dangerous to a small percentage of the population.

By John Ramspott - https://www.flickr.com/photos/jramspott/3657133286/, CC BY 2.0, Link

My Tao - A Quadrillion Dollar Problem

No-one knows exactly how much the total market in derivatives is valued at. But it is at least one quadrillion dollars. Some say that this is not a problem because there is for every long position a corresponding short position, so when everything is added up the net exposure to society as a whole is exactly zero. Derivatives are after all balanced bets where the money lost is exactly equal to the money gained.

However, this optimistic view assumes that the distribution of short and long positions are perfectly balanced against equally responsible and solvent entities. It ignores the very purpose of derivatives, which is to distribute risk in a manner similar to insurance. One side acts as an insurer so that the other side can take on risk in the real world.

This type of trade is lopsided. Insurance companies make a steady and relative moderate profit for long periods of time, only to take a blow every now and again. Insurance companies must for this reason keep adequate reserves for the occasional hit. But do all entities involved in derivative markets have the same sort of reserves? That remains to be seen.

Banks should in theory be all right. As brokers, they make money on the spread. They take no risk themselves. However, most banks do not only broker derivatives, they have trading desks where they take on risk. More likely than not, they take on the role as insurer, which generates a steady income during good times. But now that times are bad, banks are likely to be wrong footed. With one percent of one quadrillion being ten trillion dollars, even a tiny exposure to the derivatives market is likely to cause havoc in the banking sector.

But banks are not the only entities with a likely wrong footed exposure to derivatives. Insurance companies and pension funds are also likely to have taken on the role as insurer in the derivatives market. They too may suddenly face losses in the trillions now that the tide has turned.

This means that a large number of derivative contracts may default. Those who have steadily rolled over their "insurance policy" for a rainy day may not get paid now that this rainy day has finally arrived. Derivative contracts, guaranteed by insolvent entities will turn out worthless. Companies that thought themselves protected by these contracts will suddenly have to shoulder the full burden of loss themselves. This will in turn lead to bankruptcies in the real economy.

The likely response to all of this by central banks and governments alike will be an orgy of money printing. Fiat currencies are headed to zero.

By Bundesarchiv, Bild 102-00104 / Pahl, Georg / CC-BY-SA 3.0, CC BY-SA 3.0 de, Link

My Tao - The Pied Piper

Who will pay the piper? This is the question sometimes asked rhetorically when debt piles up with no clear plan to pay it back. It is a reference to the story about the pied piper of Hamelin, where the children end up gone as a consequence of inaction by the people of the town.

The point is that debt cannot simply be ignored. At some point, someone has to pay. That someone is either the creditor or the debtor. The debtor can default, in which case the creditor ends up without the promised return, or the debtor pays as promised. Alternatively, there's a debt negotiation in which the two sides arrive at a compromise. However, it is impermissible to simply ignore the situation. If no action is taken, the piper comes for the children.

If the pied piper was simply an ordinary person, he would have been the looser in the story. He would have had no way to retaliate. However, the piper is not some ordinary person, he's the spirit of debt. As such, he embodies the fact that no debt can be unpaid without consequence. Someone will pay, and that someone is the children if adults refuse to act.

But who are the children, if not the guarantee of a safe and prosperous old age for the adults? Without children, who will take care of them as they grow older? This part was intuitively understood in the past, and therefore not explained in the story. The listeners didn't merely feel sorry for the children, they grasped the full disastrous consequence of their disappearance.

People nowadays do not see this connection quite as clearly. But the problem is no less real. More so than many realize. There's an eerie connection between debt and fertility rates. People have very few children in places like Japan and Italy, where public and private debt are at nosebleed levels. Other place, we see the same pattern. The more a society goes into debt, the fewer children there are.

There's a sense among people in debt burdened nations that they cannot afford to have children, and a promise of guaranteed old age care by politicians makes it tempting to refrain from having children rather than paying down debt. But what is truly unaffordable is not to have children.

If the piper isn't paid, children disappear and there's no future. As we move into the final stage of a global debt orgy, this truth will become increasingly clear. Those who thought they were safe because of shares and obligations held in retirement accounts will be sorely disappointed because none of that has any value without children.

By Artist: Kate Greenaway (1846–1901) Engraver: Edmund Evans  (1826–1905)   Alternative names Edmund William Evans Description English engraver and printer Date of birth/death 23 February 1826 21 August 1905 Location of birth/death London Isle of Wight Work location London Authority control : Q4529602 VIAF: 71519059 ISNI: 0000 0000 8392 8947 ULAN: 500023437 LCCN: n81059993 NLA: 35071074 WorldCat - Browning, Robert (1910) [1888] The Pied Piper of Hamelin, London: Frederick Warne and Company, pp. p. 41 Retrieved on 26 July 2009. (direct link to high resolution image here), Public Domain, Link

My Tao - A Bird in the Hand

The expression that a bird in the hand is worth two in the bush portrays a simple truth. The promise of something is never as good as possession of that same thing. It doesn't matter who issues the promise, or how securely anchored the promise is, the mere separation between owner and possession waters out the value of the promise.

This explains why gold coins are always and everywhere more worth than paper notes with identical face value. Gold and paper may circulate for a while at par, but paper notes will in the end loose value against coins. This is because any separation between owners and their possessions involves risk. There is always the risk of default on a promise.

This is the natural law that Andrew Dickson White is referring to in his book on fiat money inflation. The Assignat issued by the revolutionary government of France in 1790s was securely anchored in real-estate and guaranteed by the government, yet even with an interest bearing coupon, it never circulated at par with gold. The Assignat lost value against gold right from the start, simply due to the fact that it was credit rather than money. The holders could not have known at the very start to what extent the government would abuse the trust of its subjects, so the initial below par exchange rate was purely due to the inherent weakness of credit relative to money.

This is similar to my personal experience with some real-estate that I owned in Norway. As long as I lived in the house I owned, I was perfectly happy with it. However, once I moved to Portugal, my physical separation from my property became increasingly painful. What had once felt like a solid possession, morphed into a risky bet on the Norwegian housing market. The relief I felt when I finally sold the house was enormous.

The lesson in all of this is that we must never separate ourselves too much from our possessions. Given a choice, direct possession takes precedence over credit. Physical closeness beats remoteness.

By Andrew Kraker - originally posted to Flickr as Pretty bird, CC BY 2.0, Link

My Tao - Reality and Theater

Whenever two or more people get together to arrange things to the benefit of themselves and others, we have a conspiracy. Self interest will always skew things in such a way that those at the helm of a decision making body benefit. Any apparent sacrifice is always with some future gain in mind. Just like the chess master will entice his opponent with a gambit, so will the skilled orator make apparent sacrifices for the common good.

This is simply human nature and therefore nothing to be lamented. Many conspiracies to make money are in fact benefiting way more people than they hurt. Most capitalist ventures do this in the production of goods and services demanded by the general public. Many politicians act in ways that benefit a lot of people. However, this does not mean that no dirty tricks are employed. Marketing can be deceptive, especially when used for political gains.

The constant struggle for political and economic dominance result in a huge array of half-truths and lies, cleverly devised to mask reality. In times of crisis, this becomes especially apparent. Cause and effect are deliberately confused to deflect attention from one group of people to another. Bankers will blame inflation on shop owners and gold hoarders, and politicians will blame failed policies on bankers, foreign agents and speculators. The finger pointing can be bewildering, even to the trained critical thinker.

In the end, some things will never be fully known. We will never know exactly where the Wuhan flu originated, nor how deadly it actually was. The same can be said about the assassination of JFK, and the murky events surrounding the reunification of Germany. The list of unresolved conspiracy theories are endless. However, this is much less of a problem than many think, because we do not need absolute knowledge in order to successfully navigate the world. All we need to know is the likely outcome of actions taken.

We don't need to know much about the Wuhan flu in order to know for a near certainty that prices will go up for just about everything. With production severely crippled and central banks in hyper-inflation mode, there will be scarcities of everything. Money will be plentiful but unevenly distributed. The gap between rich and poor will increase.

Yet, people will fail to act rationally to protect themselves, partially because they are unaware of the connection between unlimited money printing and economic ruin, and partially because they are too busy trying to figure out the full truth about the current situation. Instead of converting parts of their savings into gold, they argue endlessly about the effectiveness of surgical masks, vaccines and social distancing.

By Studio Incendo - DSCF2199, CC BY 2.0, Link

My Tao - Trend Chasers and Contrarians

There are two types of speculators. The most common is the trend chaser who will latch onto a trend and ride it to its conclusion. The other is the contrarian, making bets contrary to the average consensus. While both strategies can have some success, both break down over time. Trend chasers are always late to the party because trends take time to develop. By the time a trend is established, a great deal of the potential is already taken out. Correspondingly, trends are not broken before a great deal of the gain is lost. Trend chasers leave the party too late with little to no gain.

Contrarians have a similar problem. While they sometimes get the timing right, this happens relatively rarely, and when it happens they tend to leave before the full potential of their bets are taken out. They too end up with little to no gains. Neither trend chasers nor contrarians win because investing is not about timing. It's about positioning and time. Trying to spot a trend or the inevitable end to a trend is a fools errand unless this is done in the historic context of super-cycles that take decades to pan out.

Successful investors look like contrarians close to major super-cycle turning points. During major ups and downs, these same investors look like trend chasers. They ride the cycle up or down, only to turn contrarian when the trend nears a turning point. To aid them, they use historic data.

The hardest part of this is the abandoning of long strong moves in favor of trends that have yet to develop. However, this is an essential part of investing. Old trends have a tendency to break violently, and no-one wants to be surfing the wave when that happens. Similarly, new trends have a tendency to sneak up on investors before suddenly gaining strength, and no-one wants to be left out when that happens. It's well worth under-performing the markets for a few years every now and again to avoid being caught off guard when the trend turns, because that's when profits are either made or lost.

In the end, what separates successful investors from speculators is that investors position themselves for waves they know to be on the way, while speculators jump from one hot-spot to another in the vane hope of making a quick buck. As a result, speculators stumble and fall where investors go for long smooth rides.

By Bengt Nyman from Vaxholm, Sweden - IMG_8762, CC BY 2.0, Link

My Tao - Words and Action

We are constantly being advised on how to act and behave. This can come in useful. However, in order to gain any benefit from the advice we are constantly given, we must know how to separate the valuable from the useless. An age old technique in this respect is to inquire into the expert's own actions. Experts that do not follow their own advice should not be listened to, nor should we blindly trust experts who stand to profit from anyone following their advice. The advice must also have a clear practical angle to it.

To trust in God or government is not practical advice. Those professing gloom and doom with no further advice than to pay and repent are charlatans, all of them, without exception. However, some doomsayers may have a point. Especially those who can sketch out a plausible scenario for survival. I'm far from convinced that our climate is so stable that we will never have a bad harvest. I'm therefore a committed saver. I've put away some cash and other valuable for a rainy day. When done correctly, this can be done for free, even at a profit.

Another variation on doomsayer prophecies that seems to have merit is the idea that the current financial system is close to collapse. As it happens, my precautions applied to climate preparedness double as a safety net for a financial crisis. They have even tripled as relief during the current pandemic, which goes to show that good advice has practical value even in the event of the unforeseen.

However, most people who talk passionately about an upcoming crisis are merely parroting things they've heard. They haven't taken any practical precautions for themselves. This doesn't mean that they are wrong. It merely means that they aren't the experts that we should listen to. After having noted that they have made no personal preparations for the upcoming disaster, a sensible follow up question would be to ask for the source of the information parroted by the doomsayer.

Conversely, the fact that an expert is invested in something doesn't automatically give the advice credit. If the suggested investment has a short time horizon, the advice is almost certainly worthless. No-one except insiders are in a position to predict imminent success, and even such people are frequently deluded as to the actual state of the investment in question. If the advice is narrow in scope and detached from historic context, it's at best a speculative bet.

Good advise has broad application, fits into a historic context, is made by people with skin in the game, and does not promise immense riches. Only when all of these boxes can be checked off are we faced with truly good advice.

By Viktor Mikhailovich Vasnetsov - http://lj.rossia.org/users/john_petrov/166993.html, Public Domain, Link

My Tao - Time and Timing

An old time friend of mine, Atle Øi, wrote an interesting and well written blog post on the impossibility of making money on trading the market. The logic was simple and clear. For every trade there must be a buyer and a seller. Both think they are doing the smart thing, yet only one of them is the winner. Unless we have information that the other doesn't, the chances of being the winner becomes a matter of chance. It's a toss up. To trade on the assumption that we'll be the winner is therefore a fools errand.

I happen to fully agree with my friend, and the dismal success rate of day traders prove him right. There's absolutely no money to be made in trading. The only winners are the market makers, the casino owners as it were. They trade both sides on behalf of clients, pocketing the spread between offer and bid for themselves.

At first glance, this contradicts the conclusion in my book on this subject where I list a number of ways in which it's possible to outperform the market by a considerable margin. However, on closer inspection, it's clear that there's no contradiction between Atle's observation and my conclusion, because Atle is writing from the assumption that markets are efficient, while I only assume them to be efficient in the short term. Over longer time periods, markets are not efficient, and we have substantial evidence to support this claim. The most glaring piece of evidence is the Dow/Gold ratio that has fluctuated between 1 and 80 over the last 100 years.

Financial markets move in great waves in which stocks can remain substantially overvalued for decades, and correspondingly undervalued for other decades. All that is required to make above average returns in stocks is to buy them with gold when they are historically low and sell them for gold when they are historically high.

The key to success is again to be found in the power of positioning and inaction. Disciplined investor don't trade. Our time horizon spans for decades, not hours, weeks or years. When we buy stocks, we do so with the idea to hold onto them for ten years or more. When we sell, we have no plan to re-enter the stock market for similarly long periods of time.

While this sounds easy, it does require a lot of discipline, because this strategy goes contrary to our deep rooted impulse to act. We are so hardwired for survival and the need to satisfy immediate needs that the idea of doing nothing for decades on end seems absurd. Making this even harder is the fact that this strategy requires action every now and again. Very long periods of inaction, interrupted by short but decisive action, is not the way we normally act. If we do not constantly do things, we tend to drift into complete inaction.

Habits are either constantly kept alive or forgotten completely, which explains both the short term efficiency of markets and their tendency to remain miss-priced for prolonged periods of time. The long term inefficiencies of markets are due to human nature. Only people with the ability to remain calm and inactive for decades on end without loosing the ability to act decisively near market peeks and troughs can profit from this inefficiency. However, it's well worth conditioning ourselves for this type of behavior, because the rewards that can be had are truly astonishing.

By Ángel Sanz de Andrés - Own work, CC BY-SA 4.0, Link

The 5th Empire - Freedom

The political events related to the flu epidemic of this year have demonstrated that freedom is only as available as the political elite allows it to be. While this have come as a shock to many, it's hardly a surprise to citizens of the 5th Empire. They know that freedoms are always curtailed by the state during times of crisis. Any history book can tell us that, and the same books will tell us that freedoms are only returned to the people, little by little. Machiavelli pointed this out in his book on politics from 1513.

When the political elite is too slow or reluctant to return freedoms to the people, we get revolutions that rarely do anything good for anybody. They merely push power around without giving the general population any freedoms that weren't already secured. This is why the citizen of the 5th Empire refrain from wars and revolutions, preferring instead to secure their liberties through deception and evasion. Civil disobedience is not something they suddenly start partaking in when things get tough. They do it all the time as part of their never-ending struggle against the state. They position themselves in such a way that the state has close to no leverage against them.

Quite often, citizens end up better off economically when the state tightens their control on the populace. This is because draconian state measures make it more interesting for people in general to invest in the sort of things that citizens already own. Gold prices go up, as does the value of cash and debt free properties. This makes the citizens as a group more powerful. The 5th Empire expands, which in turn ushers in more freedom to everyone.

This is conveniently ignored by pro-state historians who much prefer to see freedom as something granted by revolutionaries and state appointees. But this does nothing to alter the facts. When the dust settles from the current political and economical crisis, we will see the 5th Empire rise once again. It will be liberty minded entrepreneurs, rather than politicians and their minions, that will bring freedom and prosperity back to the people.

By Nikater - Own work, Public Domain, Link

When the Price is too Low

There's something strange going on in the gold market. Under normal conditions, gold future contracts sell for a little above spot. This is because a future contract allows for free storage: Gold delivered today from the spot market has to be stored. Gold delivered a few months from today requires no storage. The convenience to the speculator is priced into the futures contract. As long as everyone is confident that gold will be delivered, future contracts will trade marginally higher than spot. However, if there's any doubt about the safety and actual existence of the gold, people will ask for delivery, and spot will trade above futures.

Confidence in the gold market is in other words reflected in the price of gold futures relative to spot. Confidence is expressed through a marginal premium on future contracts, and a lack of confidence is expressed through a premium on spot. But we are seeing neither of these two situations in the gold market at the moment. Rather than a marginal premium on futures, there's a big premium to the point where a lot of money can be made by buying bullion at spot while simultaneously selling futures. The premium is so large that it easily covers the cost of storage. Anyone with access to a bank vault and easy credit can make a killing by simply holding gold for a few weeks.

If this situation persists, bullion banks will be empty in no time, and we will presumably see a sudden shift from premium on futures to premium on bullion. But right now, confidence appears to be high. No-one is too concerned about any future delivery problem. Yet, the situation cannot continue for long. Some equilibrium must be re-established, which begs the question why we have this situation in the first place. A free market will always find equilibrium, so how can we have a situation where money can be made, risk free, by simply buying spot and selling futures?

It appears that some entity is actively seeking to suppress the spot price, but somehow failing to suppress the futures price at the same time. This entity is almost certainly the central banks that are printing a lot of currency at the moment. The last thing they want is for gold prices to react by going markedly higher. But the failure to suppress the futures market indicate that some other entity is actively interfering with an intent to drain bullion banks of their gold. This entity appears to be unconcerned about actual delivery. Most likely, it already has the gold it wants, and is merely seeking to break the bullion banks. It must know that there's hardly any gold left to be delivered. This entity is likely to have a lot of gold already secured, excellent intelligence as to the real state of the gold market, and sufficient cash to buy futures at a pace sufficiently high to outrun the production of such contracts.

Bullion banks which have had the privilege of issuing future contracts in order to suppress gold prices on behalf of central banks, are now cornered. There's a limit to how many future contracts they can issue before their credibility collapse, and the entity mopping up the contracts is fully aware of how close these banks are from defaulting on their promises.

In this respect, it is interesting to note that Putin declared at the end of March that Russia would, after a decade of aggressive accumulation of gold, no longer buy gold domestically. Russia has also sold most of its US treasury bonds for ready cash. The Russian central bank is in other words both highly motivated and perfectly positioned to pull off the sort of stunt that we are currently seeing. Other central banks may also be in on this. China and various European and Asian countries come to mind.

It appears then that someone has decided to activate the reset button. It remains to be seen if they will be successful. But time is running out. If the situation persists, bullion banks will default, and a completely new monetary system will have to be put into place so that gold can find its new equilibrium.

By P199 - Own work, Public Domain, Link

Why Small Nation States are Better than Big Ones

I'm not very fond of nation states. I'd much prefer a clan based system with families being the largest unit of political power. The reason for this is that any political structure larger than the family will automatically tend towards oligarchy, a system where a few families dominate every other family.

The natural tendency of any family is to position itself as best it can inside the political structure available to it. This is because individuals care more about themselves and their immediate circle of friends and family than they care about more distant members of society. A nation state is therefore too large a unit to be governed fairly. People in power will inevitably use the power of the state to help themselves.

The larger the nation state, the more remote is the populace from the ruling class. The tendency towards grift will therefore increase with the size of the political unit. While politicians in a tiny state may feel responsible for the well-being of all citizens, politicians in larger states will be more focused towards powerful families at the expense of the general public. Politicians, like all other people, care less about the well-being of people remote from themselves than they care about close relations.

Additionally, politics tend to bring out the worst in people, often promoting criminals to high office while vilifying the honest and well-meaning. The larger a nation state, the greater is the supply of criminals. Smaller nations don't have the same supply of such people, and are therefore ruled to a lesser extent by sociopaths.

This is why small nations, while often quite conformist, are generally more free and peaceful than larger nations.

By Norbert Aepli, Switzerland, CC BY 3.0, Link

History of the Wuhan Flu

Comparing the very first reports of the flu outbreak in Wuhan at the beginning of this year with more recent outbreaks, it is hard to believe we're dealing with the same disease. Initial reports, often supported by video footage, told of a disease in which symptoms could go from mild to extremely severe in a matter of hours. People dropped in the streets, coughing uncontrollably. Hospitals were overrun by people at death's door. However, try to find similar footage from Sweden and we come up short. What we are seeing in Sweden is a very mild version of what we were witnessing in China back in January.

Official mortality rates in China have been at a steady 2%. However, simple calculations based on early numbers indicate that the mortality rate may have been as high as 12%, which at first glance squares up with the mortality rates reported from Italy. But the numbers from Italy are misleading. Their 12% number relates to how many people die with the disease, not of the disease. Of the people who died with the flu in Italy, only 1% had no other ailment. The 12% number in China was based on a group of people who were otherwise fit and healthy. The initial outbreak in Wuhan appears to have been 12 times more deadly than what it has been in Italy.

Another interesting development is the way the flu is affecting medical staff. A large number of young and healthy doctors and nurses ended up dead in China. While Italy has had its share of similarly tragic deaths, this has been to a much smaller degree. Here too, it appears that the disease has become less deadly, a fact that was predicted by some experts back in January. Their thinking was that natural selection will always favor virus mutations towards less lethal versions, because this keeps the host alive for longer so that the disease can continue to spread. The ideal virus is therefore one that spreads quickly without weakening its hosts, which makes the common cold in this respect something very close to perfection.

It's worth noting that the common cold is in fact a corona virus, closely related to the Wuhan flu. It is therefore reasonable to expect the Wuhan flu to mutate towards its less lethal cousin, because it is the common cold that is the most ideally adapted disease. If it is true that the Wuhan flu is an engineered disease that escaped from the now infamous Wuhan bio-lab, it's even more likely that it has mutated. Engineered genetics is after all known to be extremely fickle. Purebred dogs only remain purebred as long as they are prevented from interbreeding. When purebred dog are let loose in nature, they revert to their genetic starting point within a couple of generations. This is undoubtedly also the case when it comes to engineered diseases.

All of this squares up with what we've seen. While things started out ugly in Wuhan, the disease has progressively lost its bite, and it's almost as if it has become a fairly mundane flu at this point. Going forward, we can therefore expect the disease to become even less of a problem until it disappears completely.

By No machine-readable author provided. Tobycat assumed (based on copyright claims). - No machine-readable source provided. Own work assumed (based on copyright claims)., CC BY-SA 3.0, Link

The 5th Empire - Debt Collectors

I got an unexpected text message from a Norwegian debt collecting agent this morning. Apparently, I'm owing some money to an insurance company. I used to own a cabin in Norway, and something must have gone wrong in the transfer of the property from me to my cousin back in 2018.

My only true concern in this was the possibility that the property might not be insured, so I notified my cousin, asking him if he had taken care of this detail. But first, I called the debt collecting agency to get the details. The woman who took my call had a tense voice, clearly stressed from constantly having to deal with people who refuse to pay. But I didn't make a point out of this. I just wanted to get the details of the problem, and I quickly learned that the only real issue was the possible lack of insurance on the property.

Why I should pay for an insurance that I had no use for remained unclear. My only error, If one can call this an error, was that I had not properly informed the insurance company of the transfer. But why should this involve a third party? Why not just terminate the contract and be done with it? Insurances are after all paid for in advance. There was no loss to the insurance company.

The situation seemed odd to me, and I quickly realized why. It violated natural law. In a truly free society, there can be no debt collectors, because debt collection involves the initiation of force. The episode I've just experienced, which was vaguely unpleasant to me, and clearly very unpleasant for the woman I talked to, would never happen in the 5th Empire. Having failed to pay my insurance premium, the insurance company would simply terminate the contract. This would be the case for all contracts. If the customer fails to pay up front for a service, no service is provided. Some customers may build up credit with companies, in which the customers can postpone their payments, but this would be entirely up to the companies themselves.

Without a state to mandate laws pertaining to credit, no-one would be in the position to deliberately or accidentally fail to pay their dues. Failure to pay would merely result in a failure to deliver. Conversely, if a service provider fails to deliver on their promises, customers can sue for libel. If the company nevertheless fails to deliver, they will be shunned and go out of business.

As for properties bought with credit, the property will be registered as owned by the bank, rather than the private person who remains a renter of the property until the property is fully paid for. Here too, there's no need for debt collectors. The bank can simply expel a delinquent borrower from the property that remains legally the property of the bank. The way to deal with debt and delinquencies is through collateral. Any abuse of such an arrangement by the bank will quickly result in a loss of business, so there's no need to give special protection, neither to banks nor borrowers.

The 5th Empire have no room nor need for debt collectors, and most people know this intuitively. The woman I talked to was in pain due to the fact that she was constantly braking natural law. On the one hand, she's told that the business she's working for is operating within the law, and therefore an honorable business. But on the other hand, she is constantly reminded of the aggressive nature of her work. The pain she was experiencing was due to the impossibility of bridging the gap between her heart, which wants her to live in peace with her fellow men, and her mind that tells her that she is doing the right thing, despite her constant need to be aggressive.

By Edvard Munch - Google Art Project: pic, Public Domain, Link

When the Money Runs Out

Local governments that were quick to shut down businesses in response to the flu are now suddenly finding themselves without any income. This shouldn't have come as a surprise to anyone. However, many local politicians seem to be genuinely puzzled by the sudden drop in revenues. It is as if they didn't make the connection between local businesses and their own well being, and that this fundamental connection has yet to fully dawn on them. When they shut down the local economy, they shut down their own lifeblood. Their simplistic view of the world in which economy and health are two separate entities is fundamentally flawed. Without a healthy economy, there can be no public services. The two are fundamentally linked.

The only sound strategy going forward for local governments is to allow the economy to re-start. However, this is an unappealing option to most politicians. Letting free commerce take care of the situation is the last thing they want. They will therefore try to find a way around the situation. They will beg state and federal government for bailout money, which they most certainly are going to get, because state and federal politicians are no more fond of free enterprise than the average local politician.

The central bank will come to the rescue again. It will generate trillions of fresh dollars in order to feed the federal government with the required cash to bail out local governments. But this will not help, because the real problem is not a lack of cash. Their lack of cash is due to a lack of production. It reflects the lack of resources available in the local economy. Getting a bunch of fresh dollars from the federal government isn't going to magically produce any of the resources now lacking locally. What good is a bunch of dollars if the resources required are unavailable or in very short supply? It will merely send the price of things soaring without alleviating the shortages created by the economic lock down.

The local economy has to be re-started. There's no other way. But politicians will try absolutely anything before they will let the free market sort out the mess they've created. Going forward, we're likely to see tremendous inflation before politicians finally give up their iron grip on the economy.

By Bundesarchiv, Bild 183-R1215-506 / CC-BY-SA 3.0, CC BY-SA 3.0 de, Link

When Behaving Normally Becomes an Act of Rebellion

Easter holds a special place in the Norwegian psyche. It marks the end of winter, and the way it is celebrated is that people move out of the cities in order to self-isolate in the mountains where the snow continues to lay deep. They flock to their cabins from where they go skiing, overdosing on snow and sunlight. As a result, towns become markedly empty of people. Those who live in cities, with no cabin in the mountains, can celebrate in their own way as they have the towns more or less to themselves.

All of this would be ideal in this time of the flu. It would achieve the social distancing required in order to flatten the curve, and it would happen spontaneously as it is a deep seated part of the Norwegian culture. However, politicians have decided to ban this annual ritual on grounds that it is unfair to have people celebrate spring under the grim circumstances of the flu. Everyone have therefore been ordered to stay at home.

This radical measure is unheard of in peace time. The last time Norwegians were faced with a similar restriction to their freedoms was during the early 40s. But the average Norwegian is trusting of their government, so the intrusion into their freedoms has been met with acceptance. Instead of self-isolation, people decided to go out for the short walks, generously allowed to them by their rulers.

The result of this was that the streets of Oslo were suddenly packed with people. A short walk to a Norwegian lasts after all anything from one to six hours. Going out into the fine weather to celebrate the first day of Easter, none of these people were thinking of rebelling. They were merely hungry for the start of spring, and the fine weather lured them out into the streets. But once they found themselves all out at the same time, many must have realized that what they were doing was in fact an act of rebellion. The mayor of Oslo certainly recognized it as such. Furious to see people disobeying his orders to stay home, he called the police department. But no-one there were interested in using manpower to break up what was after all within the law, all be it a liberal interpretation of it.

Impatient with his police force, the mayor called the national guard. But again, he was met with reluctance. It would look too much like the sort of measures that were used during the Nazi occupation of Oslo. Besides, the Nazis were never successful in their efforts to subdue the people. History is clear. Nazi laws do not work well against people who demonstrate defiance in peaceful ways. Without any violence being used by the demonstrators, Nazi methods fail because Nazi methods require violent opposition in order to come across as reasonable.

Having reacted in the irate way of Quisling himself, the mayor of Oslo is unlikely to survive this episode politically. He has shown himself for the person he really is, and will from now on be associated with the Nazi occupation of Oslo. Only a miracle can save his political career going forward.

Going forward, it will be interesting to see if this peaceful rebellion will persist, and eventually force the Norwegian government to backtrack from their draconian measures that prevent people from self-isolating in their cabins in the mountains. While many must have been surprised by the rebellious nature of their walk, it's unclear if they will continue to go for these walks. Many may feel ashamed about their unwitting protest. Others may be quite enthusiastic. Which side wins out will be clear over the next few days.

By Riksarkivet (National Archives of Norway) from Oslo, Norway - Portrett av Vidkun Quisling i sivile klær, ukjent datering., No restrictions, Link

The 5th Empire - Civil Disobedience

Civil disobedience is not about petitioning the government for basic rights and/or privileges. Rather, it's about living life as free and detached from government as possible. This means that we obey the laws we find tolerable and ignore the laws we find intrusive, provided they are impossible to police. It is for instance impossible to judge whether someone is simply out walking for a bit of fresh air or out on an important errand. A curfew that only allows "essential" movement can therefore be ignored. On the other hand, easily enforceable laws should never be opposed, no matter how intrusive we find them.

We should never gather in groups and march together. That merely stirs up tension. The objective is not to cause a stir and a fight. The objective is to render government irrelevant. The trick is therefore to skirt the fringes of what is considered legal. Make it clear to everyone that we do not take government dictates very seriously. Encourage others to live as freely as we do ourselves.

I like going for walks in the neighborhood. I have no intention to give up this just because of a flu. But I don't make a big deal out of this. I'm not deliberately going to places where the police is patrolling the streets. My walks take me to the outskirts of the city where no-one ever bothers me, and I delight in the fact that everything is quiet and laid back. The atmosphere is quite serene.

Once this type of behavior becomes second nature, we find ourselves inside the 5th Empire. As citizens of the 5th Empire, we operate with a minimum of exposure to government and the banking system. We observe politics as the clown show that it is, because we are not dependent on it in any significant way. It does not matter whether it is the red or the blue team that's in charge. We do what we please regardless.

By Jongleur100 - Own work, Public Domain, Link