The Omega Point
Early in the 20th century Jesuit Priest Pierre Teilhard de Chardin coined 'The Omega Point' which is a belief that everything in the universe is fated to spiral towards a final point of unification. This is analogous to what happens with:
The Rise and Fall of Empires
US Dollar
Gold
Oil
Within the global economic system. As the system continues to accelerate it will inevitability unify the Omega Point of capitalism. Only once this happens will any alternative start to make sense. The US dollar will make its last stand during this Corona pandemic and as we will observe, reaching unification will take time. Did it expand throughout the global system or did it contract?
*Pierre Teilhard de Chardin’s ‘The Omega Point’ theory.
Transcending to Greatness: Alpha to Omega
If we make an objective analysis of the current state of things, it would seem that people prefer to accept distorted signals oftentimes at the expense of clear ones. They enjoy indulging on the disseminated literal sense of the word and fail to see the importance of the overall narrative.
The ideological infiltration of the media and institutions is the disease of our leaders and economic ‘experts’. Focused on self-serving relationships between big business and government. Subsidies for industry. Favoritism over merit. The real pandemic.
What’s obvious.
During the worst economic pandemic in human history, the finance industry and its ‘experts’ the world leans heavily on for guidance, direction and solace, froze and stood idle. Like deers stopped in their tracks, lost in ‘headlines’. No clear path, no trends to follow. A ubiquitous state of limbo. Exhibiting their true colors.
Just because it’s obvious doesn’t mean that all can see it. (Old Vietnamese proverb.)
Many plan and anticipate for linear changes. This is where they thrive and prosper. But if anything unorthodox or textbook suddenly appears, they freeze and idle (even ‘titans of industry’ that we seek reassurance from). Idling is not a sound investment strategy.
Only few can model for or even fathom exponential pivots and are primed for universal disruptions. This takes stratospheric levels of thought and thought processes of cycles (Omega Points).
Interestingly there is a comparable model to the Omega Point:
The Establishment has no Prophets
*Synergists are a rare breed, like a pink unicorn in a field of horses.
The convergence of the pivot (midpoint) downward slide through administrative and bureaucratic disintegration, finally arriving at the Omega Point.
The Omega State: New World Order
Let’s go deeper. There are direct parallels between the life cycle of empires, the journey of characters found in our favorite stories and developments in finance. Simply put, there is a progression of rise, peak, fall and Omega Point’s.
Large empires of the past including the Ptolemaic Empire (Ancient Egypt), Qing Dynasty (China) and Siam Empire (Thailand) that lasted 150-250 years, follow this sequence:
· New World Order: Constitutional Framework
· Capital Development: Pain and Prosperity
· Capital Development: Debt Bubble
· Capital Development: Wealth Divide
· Capital Development: Credit Crunch
· Capital Development: Inflation and Devaluation
· Revolution and War
· The Omega Point and Repeat
Similarly, Project Gutenberg revealed that characters found in our favorite stories tend to return to 6 repeating ‘emotional arcs’, journeys the character goes through to make the plot of the story. The Icarus emotional arc deals with the character experiencing a rise then fall in fortune.
*Icarus can fall and you may not notice
In finance we are all too familiar with the archetypes of bubbles, booms and busts. This story has been told and re-told, over and over again.
Nothing in human history has permanently endured through the ages.
For a long period of time, I sensed things were amiss. Were we entering the later stages of these sequences?
May 2019
Right now we are in a period of massive wealth divide, credit crunch and various wars based on De-globalization, Debt (worsening), Demographics (worsening). This is the new Dark Age.
The Plague of the Dark Age
Infectious diseases and acts of nature like droughts and floods have greater adverse effects on the economy and markets compared to wars and revolutions. Taking inspiration from conversation with Professor Roger A. Pielke Jr., discussing scientific modelling, climate change, the intricacies of correlation versus causation and politics, a systematic plan for dealing with these acts of nature was developed.
The corona pandemic is similar to natural disasters in a sense that its hype and hysteria are exacerbated by economic damage.
*The mortality rate of Coronavirus is less than normal rates for most age groups.
An examination of U.S. hurricane’s from 1900 to 2013 shows that power dissipation and landfall have been declining and oddly further amplified by economic growth. This phenomenon is also taking place with the corona pandemic. The impact is not confined to geographical regions with high density urban areas. The economic impact may be pronounced in agricultural areas where central farming supply chains may be devastated by a natural disaster. However, in some emerging markets, like China and Vietnam, where farmland is more fragmented (for human capital reasons), areas and supply lines may not suffer much damage.
Economic damage increases as GDP and urbanization increases.
To easily assess the impact a major crisis has on an economy we will use the US dollar as a barometer (consistent currency).
Since 1990, for both weather and non-weather related catastrophe, there have been increasing losses in the US dollar rate (74% increase in the former, 182% increase in the latter). But proportionate to total global GDP this rate has decreased. The corona pandemic is a much more extreme example of this on a per-case to GDP level.
What was The Price for America?
* 6 trillion to national debt
* Laid-off or furloughed 50 million workers
* Placed 60 million on food stamps
* 3.5% to 14.7% unemployment
* Crippled the petroleum industry
*Bankrupted the service industry
* Caused an impending meat and protein crisis
* Threatened, fined, and arrested church leaders
* Exacerbated mental health problems
* Shut down schools and colleges
* Given unbridled power to unelected officials
* Increased suicides higher than COVID deaths
* Delayed surgeries and treatments for profound illnesses
* Infringed civil liberties
* 300 million Americans on house arrest
Another note generally missed but worthy of considering is the duration of crisis.
The economic cost and war length typically only last for two to three years. Periods of natural disasters (like droughts, floods, and epidemics) vary and lesson in severity as people adapt and familiarize to the new conditions.
It is seldom to experience multiply major crises at the same time, ie economic, revolution and natural disaster, at the same time. But when experienced, it is these multiply crisis that fast track a society on the progression sequence, accelerating through credit crunch, inflation and devaluation, revolution and ultimately reset and repeat. Quick boom, quicker bust!
Each time these extreme types of crisis are experienced, an Omega Point ensues. New leaders replace the old. There is quick adaptation for new adjusted rules. A more robust society succeeds. A Dark Age World Order prevails. There is a 10 to 20 year transition phase between the economic and political cycle (the Dark Age), before converging to the Omega Point.
Currency Wars: Survival of the Fittest
Every great crisis of human history is a pass of Thermopylae, and there is always a Leonidas and his three hundred to die in it, if they can not conquer.
Following the 1700’s Age of Enlightenment, there was immediate accelerated economic growth and a greater acceptance and use of various foreign notes. Surprisingly since then, 80% of these currencies have been abandoned due to ‘hyperinflation’ (major state debt), wars or revolution.
Hold that thought for a moment. Currencies run on par with our states or governments. There is an 80% chance that our government will fail within 150-250 years.
*King dollar has worked since 2014
A standout currency enduring from those times is the US dollar. It has seen the most accelerated growth and is now regarded as the reserve currency of the world. Today, it accounts for approximately 60% of international transactions, savings and borrowing.
· Euro, 25%.
· Yen, less than 10%.
· Renminbi, approx. 2%.
The US total GDP is 20%, while the US dollar, still reigning supreme accounts for 60% of global reserves. We accept all payments, only US dollars. This domination has even come to the forefront during the corona pandemic. As economic stimulus circulates more dollars into the economy, there will be a rise in corporate, global and government defaults. More and more dollars will be required to service this swelling amount - $20 trillion (FY2020). Ultimately, dollars are the current liquifier of assets in a period of nil demand. Below you can see global corporate debt in US:
* Pre #covid_19 reference
Omega Points: The Buck Stops Here
*Unity and division. Symmetry and asymmetry.
Speculators in Bitcoin and Gold assume that the collapse in dollar will happen before the 'Omega Point' yet this is not the case. The dollar has encroached the entire global economy and most liquidity created through debt, is part of this system.
We are all slaves to the dollar. Ironically, any collapse in the dollar will require more dollars to save us.
The US Federal Reserve and the IMF have both launched schemes to lend dollars to countries in need as part of their efforts to help combat the economic impact of the coronavirus pandemic. The Fed’s temporary dollar swap lines cover 14 central banks, including those of Brazil, Mexico, South Korea and Singapore.
The global US money supply is exceeding all economic growth. This is occurring with no demand or money velocity.
It simply is not required to achieve this distortion - leaving many afraid.
Dark Age Gemstones
Gold has become the currency of choice in closed markets such as China, India, Russia and Vietnam because it is accessible, tangible, and simplistic to understand. Gold is bought and sold through certified accredited market makers which add a sense of creditworthiness and liquidity. A feature that cryptocurrencies do not currently possess. It will be difficult to sell gold dust freshly panned from a creek without a seal without it being heavily discounted comparable to the Net Asset Value (NAV).
It should be noted that it will take more than reaching the Omega Point and failing of all speculative and tangible assets, institutions and governments before any shiny metal is used as the reserve global currency.
This is due to the natural lust for power of man prevailing and creating a system of control and oppression based on the idea of debt. Debt cannot be inflated when pegged on gold.
This reason alone disintegrates the extreme upside that many are hoping for.
*Global reserves have ‘staying power’ even post the Omega Point
A Barrel on Point
The primary source of energy for the world, Crude Oil is mainly traded for in US dollars (Petrodollars). It was standing long at $25 but has now increased to $33 (25% positive in a short period).
The price is determined strictly by demand and in this particular case, demand is driven not only by actual usage and consumption but also on US dollar liquidity.
Through ‘officially’ being traded in dollars, accelerated technological innovation and ‘savvy price management’ by ‘influencers’, the worlds ‘energy reserve’ is literally a never depleting fountain of growth for the markets.
As an example, China is using a large number of its US dollar reserves to build up its energy assets. Industry sources indicate that they are seeking to fill up all available oil storage, buying 57 million barrels in the past 6 weeks (again paying in US dollar).
*Total EM FX reserves
This energy source accelerates the US Dollar to the omega point.
Last Reservations
Karl Marx one said, “History repeats itself, first as tragedy, second as farce”.
Through debt, the 'farce' will inevitability progress history to an Omega Point, a New World Order.
Nothing’s assured.
The only certainty is the prolonged life of all things labelled reserve.
Reserve currencies, energy reserves.
Simply put, ALL RIGHTS RESERVED!
Amen to That!