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The End Of The Beginning Or The Beginning Of The End?

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The End Of The Beginning Or The Beginning Of The End?

Authored by Ryan Selkis via Messari.io,

I don’t consider myself superstitious or paranoid, but this past week I’ve had a rare combination of bad omens, sleepless nights (I *never* have sleep issues), and intuitions that have left me convinced we may truly be at the cusp of “The Fourth Turning” – a sort of generational reset – where the coronavirus serves as the catalyst that sparks mass societal changes which were already in motion thanks to federal government dysfunction, never ending global monetary stimulus, and declines in traditional media.

The Fourth Turning in Strauss-Howe’s generational theory, or the “Crisis”, is an “an era of destruction, often involving war or revolution, in which institutional life is destroyed and rebuilt in response to a perceived threat to the nation’s survival. After the crisis, civic authority revives, cultural expression redirects towards community purpose, and people begin to locate themselves as members of a larger group.”

I’ll concede there is probably a heavy confirmation bias in paying any attention to Strauss-Howe, given that those who have already gravitated to crypto are much more likely to hold deep personal levels of distrust in our institutions. Still, I find the model a bit eerie in its predictive power given it was proposed 20 years ago. Though it was (is?) derided as pseudo-science by scholars, I find it worth reading up on.

The trillion dollar macro question seems to be whether we are at the “beginning of the end” or the “end of the beginning” of this Fourth Turning, a trite way of considering whether and how big global events like elections, terrorist attacks or wars, massive technological breakthroughs, pandemics, etc. will spark much bigger changes beyond their local peaks. In other words, is a given event a black swan or an expected event in the natural course of history? When it comes to the coronavirus, I tend to think the black swan is not the emergence of a pandemic, but the second and third order effects the virus could have on global politics and trade.

My logic runs as follows:

  1. Compared to the seasonal flu, the coronavirus is more contagious, deadlier, harder to contain, takes up more critical medical resources, and has a longer asymptomatic infection period. It has no effective vaccine / treatment, and can infect entire populations in close quarters (families, hospitals, Diamond Princess, etc.) So if containment efforts fail, the virus will overwhelm global healthcare systems.

  2. The key variables I’m tracking (with best guess assumptions) is that the virulence (R0) is 2-3x worse than the flu, 5-15x deadlier, more quietly contagious, and leads to a much higher percentage (20%) of critical medical events.

  3. Extrapolations are dangerous, but these variables suggest there could be tens of millions of potential deaths and a complete overrun of most critical care in global healthcare systems. Barring some miraculous disappearance of the virus (or new data), we might expect to see aggressive containment measures with massive economic ripple effects.

  4. In a world where ~60 million people die every year, 10-20 million deaths sounds scary, but it’s really a short-term blip in mortality. The real devastating impact will be felt throughout the global economy, where a rise in nationalism / populism / isolationism, meets escalating trade wars, meets a virus that tests the resilience of interconnected supply chains on an unprecedented scale.

  5. We’re already starting to see multiple glimpses of the potential economic contagion, and I have kept a running tally in my document on the virus here.

I’ve written about this virus with such obsession and urgency over the past several weeks, not because I’m afraid the sky is falling, and we’re all screwed, but because I remain optimistic about whatever comes next even if the worst case comes to pass.

It is easy to get fearful (or dismissive) about the idea something like the coronavirus could lead to a global reset, and to mock the prophets of doom.

It is harder, but more important to prepare for, embrace, and work towards the second phase of the Fourth Turning: the post crisis revival of civic authority, cultural embrace of community, and the rally around a globally common purpose and identity.

If things get worse and we go into a prolonged period of self-isolation, what role will crypto pioneers (who have the luxury of working remotely) play in building a more resilient economy and post-crisis future?

I hope it’s more meaningful than mere speculative games.

It may have to be if crypto is to survive a global recession.

Today also happens to coincide with the sixth anniversary of the Mt. Gox bankruptcy, one of the most stressful events of my life/career.

I break down the full play-by-play on Charlie Shrem’s newest podcast, including how I got my hands on the fateful “crisis strategy draft” smoking gun document; broke the story; then went to war with skeptics, trolls, and the Bitcoin Foundation for falling asleep at the wheel with respect to warning the community about the Japanese exchange’s problems. 

It was fun to recount the full tale, and it’s a timely reminder that things don’t always end up as bad as you think they might: I sold all of my bitcoins after breaking the story out of fear the event would prove existentially bad for bitcoin.

But the Mt. Gox saga turned out to be the end of the beginning. Not the beginning of the end.

I hope I am wrong about the coronavirus in exactly the opposite way: that containment measures are working, that it turns out we are at the beginning of the end of this outbreak, and that we’ll mostly return to normalcy in a matter of weeks or months. We’ll see.

Tyler Durden

Wed, 02/26/2020 – 16:25

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