The Big Short is one of my favorite movies. Such great storytelling about the different dimensions of the financial collapse in 2007, told through the lens of a prescient few that actually benefitted from the crisis.
It reminded me a bit of what’s going on in today’s economic environment where capital is at an all time high, reflected in frothy valuations across private and public markets. There are a lot of signals that the party is going to end soon, but who knows. I don’t have a crystal ball.
It also made me think about the fragility of centralized institutions - corporations and governments alike. Businesses operate trying to maintaining an equilibrium between supply and demand to keep innovating. Governments feel permanent but are also just constructed institutions that have real flaws. Right now, many governments are waking up to a threat to their sovereignty that they have never dealt with before - delvaluation of their money due to decentralized cryptocurrencies. Libra has actually done them a favor in attaching a singular body to the face of global cryptocurrency, and governments around the world are now actively blocking it through regulation. Bitcoin, created over a decade ago, still grows strong because there isn’t any one target to block.
Above all, in the face of upcoming risk, the safest place to be is a place of self awareness and self reliance, to a place of personal antifragility. We can weather any storm when our futures are not tied to those of a larger institution.