Caravaggio's Missing Masterpiece: “Nativity with St. Francis and St. Lawrence”

 

The Strange Story of Bitcoin & A New Financial Order

Despite the skeptics and critics of Bitcoin as an asset class or a currency, there is one thing that is compelling about the shift in money (speculative, retail and increasingly institutional) into Bitcoin: it’s the idea of a safe haven from the implosion of the fiat money system.

As a currency, it does not serve as a stable store of value with a volatility of 480% and a mean annual return of 226% over the last eight years. Is it an inflation hedge? 

Well if you compare its annual movements with the CRB All Commodities Index, it has very low correlation of 25% and with gold, the correlation is slightly higher at 39%. Against equity assets such as the S&P 500 and Nasdaq, the correlation with Bitcoin is around 45%.

So in principle, Bitcoin’s low correlation with most asset classes makes it a potentially good asset class to be part of a diversified portfolio. But what is interesting in my study is that Bitcoin is reasonably well correlated with Emerging Markets as shown in the chart below. Does this suggest that it is also inversely correlated to the U.S. dollar?  

Based on the three key functions of a currency (measure of value, store of value and means of exchange), Bitcoin does not qualify as a viable and efficient currency given that its value fluctuates and it is slow in processing transactions.

But the key attraction of Bitcoin, apart from serving as a diversification tool for portfolio investors, is that it is a decentralized currency that is independent of government and central bank controls, and by implication, it has no underlying liability.

Anyone who holds fiat currency will be subject to devaluation in its real purchasing value as central banks continue to print money and debase the currency in order to reduce their public debt burdens. 

In the past year, governments have piled on their debt levels in order to rescue their economies from the pandemic-induced recession. This increase in debt was accompanied by massive money printing by the U.S. Federal Reserve, the European Central Bank and the Bank of Japan among the leading economies.

It is therefore no surprise that the fear of fiat money devaluation and hyperinflation has driven demand for Bitcoin, whose supply is limited at 21 million units. 

                                                              

                                                                        
                                                                            

The Beauty & The Parabolic Challenge of The U.S. Constitution

The beauty of the United States' Constitution is that any citizen, under the First Amendment, is free to fight for their right of opinion and actions in a court of law whenever their rights are threatened by the state or corporations.

In many countries where atheistic doctrines and ideologies dictate government policies (e.g. Nazi Germany, Stalin’s Russia, Mao’s China), people are put in jail for expressing their personal beliefs, belonging to a certain ethnic or social group or just reading the bible and talking about it to other citizens.

So whatever political stand a citizen takes (and there are many diverse views, both constructive and harmful), Americans ought to consider themselves truly blessed that their nation is protected by a God-inspired Constitution. 

That unique Constitution enshrines the individual and his/her right to freedom. But with the granting of individual freedom, there is the moral dilemma of being held to account for the good and evil in human nature and political governance. With great freedom, comes an even greater responsibility.

The first President, George Washington, warned the nation in his Farewell Address that man’s innate love of power will tend to create a real despotism in America unless proper checks and balances are maintained to limit government power:

“It is important, likewise, that the habits of thinking in a free Country should inspire caution in those entrusted with its administration, to confine themselves within their respective Constitutional spheres; avoiding in the exercise of the Powers of one department to encroach upon another. 

The spirit of encroachment tends to consolidate the powers of all the departments in one, and thus to create whatever the form of government, a real despotism. 

A just estimate of that love of power, and proneness to abuse it, which predominates in the human heart is sufficient to satisfy us of the truth of this position.”

 

The Parabolic Challenge

 

When man is given freedom to do as he pleases as long as he does not harm other fellow citizens, he can, by his own self-will, become a hedonist – a seeker of personal pleasures or at worst, a political nihilist - a person who believes that life is devoid of any moral meaning except to exercise power for himself and over his subjects. In other words, a despot as described by Washington. 

But America’s traditional values preserve the right of individual freedom for a higher and nobler cause, which is the betterment of the human being, both economically, intellectually and spiritually.

 

This polarity between absolute personal freedom and conservative values is where the Constitution becomes a parabolic challenge to human nature. In America's democratic republic, the citizen has the right to elect his representatives to be in the executive (the government) but he/she does not directly elect the president.

 

All elected representatives are beholden to Congress in passing laws and policies. So the Constitution does allow American policies to veer towards any political doctrine such as European style socialism or social justice philosophy such as equal rights to LGBT as long as the party that is in power has sufficient votes in Congress.

 

However, the true nature and vision of the American nation as envisaged by its founding fathers is not one where the state’s powers subsume individual liberty. It is still a nation under one God despite the rise of secularism, consumerism and liberal values.

The U.S. Constitution’s commitment to religious freedom is straightforward as the First Amendment bars Congress from making any law "respecting an establishment of religion or prohibiting the free exercise thereof."

 

But, in the last three decades, liberal issues such as same sex marriages have increasingly divided the consensus surrounding religious freedom: should Americans be free to exercise a religious objection to same sex marriage or does the U.S. Constitution mandate strict church-state separation?

 

Republican Ted Cruz made a sound defense of religious liberty when he said in 2016: "We're a nation that was founded on religious liberty and the liberal intolerance we see trying to persecute those who, as a matter of faith, follow a biblical definition of marriage is fundamentally wrong."

Hedgehogs & Foxes: Which Are You?

 

Using Isaiah Berlin's metaphor of the hedgehog and the fox, America is a hedgehog because it only knows one thing, which is individual liberty, even if that liberty is fought for in foreign lands for its own selfish and destructive interests. 

This insight into America’s potential promise as a beacon to other nations was shared by Washington in his 1796 farewell speech:

"Observe good faith and justice towards all nations; cultivate peace and harmony with all. Religion and morality enjoin this conduct; and can it be, that good policy does not equally enjoin it? It will be worthy of a free, enlightened, and at no distant period, a great nation, to give to mankind the magnanimous and too novel example of a people always guided by an exalted justice and benevolence."

In contrast, fox nations tend to be secular nations that experiment with a mixed bag of political doctrines and systems. They may evolve and learn to be more efficient after going through many trials and errors in their histories (Europe, China) but they are intrinsically adapting to and improvising with the times with many strategies and tactics.  

 

The world today has survived and thrived within the market-based trading relationships between the hedgehog and fox nations. But once the hedgehog nations lose their sense of identity and pretend to be foxes, they will lose their way and eventually go into decline as a nation. Their global influence and soft power will be eroded in favour of the fox nations, a jack of all trades and master of none.

 

Today, in 2021, the U.S. constitution and its enshrined values is facing a great challenge with the controversial election of Joe Biden and the Democrat party. 

Not since Franklin D Roosevelt's New Deal has America encountered a more progressive and radical left policies under the Biden administration. 

For instance, Biden has repeatedly proclaimed his firm belief that all Americans deserve a fair wage. In the proposed Equality Act (an amendment to the 1964 Civil Rights Act which is up for a Senate vote), Biden emphasizes equality of outcomes based on gender, sexual orientation and race rather than a meritocratic system of equality of opportunities. 

His promotion of Critical Race Theory in schools is a clear indication of a post-modernist agenda of dividing people by race, gender and class.

 

And the tragic truth about the U.S. Constitution and the Republic is that the system allows this hedgehog nation to become a fox nation.

One may ask, is it morally or politically wrong to become a fox nation? No, simply because it is the free, democratic choice of the individual and the electorate, as a group, to determine the soul and destiny of his nation. 

But it will be an outright disaster because it goes against the grain of America's true identity. 

The parabola of a prodigal son turning away from the errors of his ways may be the current destiny of America. Will it be too late for the nation to arrest the roots of its decadence?

 

Hopefully, Winston Churchill’s insight about Americans will ring true: "You can always count on the Americans to do the right thing after they have tried everything else." 

And that, incidentally, is the way of a fox, trying all kinds of ideologies and value systems to arrive at its ideal spot.

  

Will The Next Singapore PM, Please Stand Up

Political developments across both sides of the Causeway cant be more different. 

One side is filled with drama like the game of thrones. The other side is so predictable and civil that you can even hear a pin drop during parliament sessions.

But lately, there are some surprising twists to Singapore' succession plan for the PM post, which on it's own, is historic news in the city state.

The PM-to-be Heng Swee Keat has withdrawn his candidacy on grounds of age (59), short runway (a cryptic metaphor?) and the Covid challenges (which he presumes wont fade away until 2025). 

So while there is an ongoing nail biting rivalry among Malaysian politicians to be the next PM, in Singapore, it is the opposite: they appear to be competing not to take the hot seat. 

Why? Nobody wishes to be compared with Lee Kuan Yew (LKY), much less his sharp foresight and problem-solving skills.

In fact, Heng himself, although known to be the blue eyed boy of LKY, is, on the same token, said to be just an excellent foot soldier. But not PM material.

Lee Hsien Loong (LSL) himself is but a shadow of his legendary father. Yet, he has not being scrutinised as much as the 4th generation leaders for two reasons: his predictable succession as the son of LKY and the new economic challenges that Singapore faces are unprecedented.  

Expectations are high for a redesign of Singapore's branding in the new global landscape of the pandemic, deglobalisation and intense geopolitics.

Former trade minister Chan Chun Sing (recently appointed to take over the education portfolio) seems to be most likely next in line. His boyish demeanour doesnt reflect the toughness or spartan roughness of LKY. Neither does his local accent and occasional speech slip-ups burnish his image in the cosmopolitan city state. 

Will Singaporeans accept his leadership? Or the other potential candidates Lawrence Wong (new Finance minister) or Ong Ye Kung (Health minister), who, incidentally, is the most well regarded by the public, second to Tharman. 

Whoever is the next to take the hot seat, the public will eventually be persuaded to accept with the full cooperation of the state-run media. 

But foreign leaders and global agencies may still compare the new PM, fairly or unfairly, to the founding father of the city state. 

Even at this crucial selection stage, the scrutiny of the public and the world on any future PM candidate will be intense especially leading to the next General Election in August 2025.

A Double-Minded People Creates A Double-Minded Nation

The three key psychological reasons why a nation or individual fails to achieve anything of substance in this era of disinformation are:

1. A double-minded mentality (hypocrisy in saying one thing & doing the opposite). 

2. Giving oneself excuses (e.g. "our nation was brutalised by the imperialists 100 years ago, so now we need to hate the West and avenge our honour.")

3. Intellectual indifference. Not believing in any ideals worth sacrificing your time and effort in sharing the merits with others. It is intellectual complacency that is inextricably linked to an education system devoid of critical thinking training. 

Meanwhile, others, who don't have these mental flaws but are passively indifferent to people who do, are actually complicit in their failures.  

Extending these root problems to the macro level, the beginning of a failed state or society starts with a few good, reasonably intelligent men who compromised their integrity and vision of hope. Either due to convenience or personal gains.

And this state of the human condition brings us to how a nation's destiny deteriorates, hits bottom and then, miraculously, reinvents itself.

It's Not Just Great Leaders Who Change History

The history of great nations as well as the turning points of lesser nations have often been portrayed as events driven by great, gifted leaders: 

Lincoln in the America of the 1860s. Gandhi in the India of the 1940s or Deng Xiaoping  in the China of the 1980s. 

But what it takes for a nation to turn from an era of hopeless despair and decline into an era of optimism and renewal is more than just the emergence of a leader.

It takes a community of wise, persevering  men and women who would have engaged in deep spiritual struggle for the nation's destiny over several years. Nothing occurs by chance.

Yet, it is more the rule than the exception that a nation that has fallen into corruption and decline usually gets worse over time, becoming a basket case for the world to look at with both pity and loathing.

An Adopted Nation By Chance 

So, I was quite bemused when an old journalist friend Professor Harish Mehta who manages an Asian strategic journal, asked me to write about this small South East Asian country of mine which, incidentally is not my country of birth though I am a citizen.

The country is Malaysia, once tagged as an Asian tiger economy in the early 1990s but has since then, gone through a never-ending cycle of fortune and misfortune.

I wont go into the details but these cycles that I speak of are economic, political and psychological in nature.

A Simple Yet Baffling Paradox 

The paradox of this nation is quite simple yet baffling to outsiders. 

On the one hand, Malaysia is, by and large, a multi-ethnic nation comprising about 67% Malay bumiputeras (ie Malays and indigenous natives), 25% Chinese and 7% Indians who have lived peacefully with each other for the most part of the country’s six decades as a sovereign nation apart from an ugly race riot in 1969.

This ethnic mix of Asians and the peaceful co-existence of the country is unique in many ways. You might call it the axiomatic vision of God for Malaysia.

On the other hand, the country’s ethnic communities have been divided by race-based political parties thanks to the self-seeking ambitions of politicians who exploit the mindsets of its respective communities. 

(Here we are referring to maverick politicians such as  the former two-time Prime Minister Tun Dr Mahathir who fostered not only a certain race-based mindset but a generation of crony capitalists).

Why is this a baffling paradox? Because the ideal and the reality are not only at odds.

There are internal contradictions within the ideal and the reality on their own. 

One such example is the contradiction of being religious (i.e. a lover of all fellow human beings) while feeling morally justified in treating certain people groups with unfair economic prerogatives (in terms of public sector jobs, scholarships and government contracts). 

At times, critics attribute Malaysia's root problems to half baked intellects and mediocre men of good intentions but flawed methods. 

By and large, the common antagonist is usually the old fox himself, a moniker for Tun Dr Mahathir.

But I prefer to describe Malaysia's problems as one of being double-minded. Like a split Jekyll and Hyde personality that has become unrecognisably one person.

Many psychological problems stem from man's inability or refusal to see and understand who they really are.

Instead, the human psyche is either focused on the past (where they come from; family and roots) or the future (aspirations and hopes).

In fact, one can categorise nations as either backward-looking or forward-looking.

A nation will tend to be backward-looking when it is led by backward-looking leaders who glorifies past victories, past glories, often in the context of race, religion or partisan politics.

My key point is that, in order to be a forward-looking nation, we need to stop the rush to plan ahead or restore a past glory but rather, to see who we are, first of all.

The failure to understand your true identity, your true national nature will only lead to failures in future endeavours.

Hedgehog or Fox?

Is your nation a fox who is good at many things or a hedgehog who only specialises in one competitive advantage? Unfortunately, Malaysia is a hedgehog that has made some failed attempts at being a fox. 

What are the people good at? Living peacefully with pragmatic respect for each other's ability to work efficiently and practise our faiths freely. 

Since the 1970s, that is an unspoken formulae that underlined the relative economic success of Malaysia despite political and institutional obstacles. 

From 1970-1990s, Malaysia succeeded in transforming its economy from a low income to a middle income nation by becoming a prominent manufacturing exporter of electronics products. 

But in the 2000s decade, we saw a slow erosion in our economic competitiveness in the wake of more efficient nations, namely China (mass production of cheap electronic goods), Singapore (brain drain) and lately Vietnam (mid-level manufacturing). 

And in terms of political stability and policy clarity, Indonesia is also gaining the upper hand over Malaysia.

Faced with so many emerging regional and global economic competitors, it is no surprise that Malaysia has fallen into the middle income trap. 

It is at this stage of the impasse that the hedgehog tries to learn fox tricks, which are mainly making many plans with little confidence or faith in following through.

This state of affairs was encapsulated by several key policy failures, essentially the flip flop policies that hampered the promotion of English as a medium of instruction. 

Other causes include the misallocation of resources into real estate development, white elephant projects and the 1MDB sovereign fund scandal.

Complicating Malaysia's economic reform agenda is the fact that the Malay-centric parties such as UMNO hardened themselves into more intense identity politics and race rhetoric to strengthen their rural vote base after the Opposition parties gained ground in 2008 & 2013 before eventually taking over on May 2018.

Hedgehog Learning Fox Tricks

So going back to the animal analogy, a politically exhausted hedgehog can only learn a few fox tricks in order to compete with the surrounding fox nations. 

Instead of trying to learn the methods of the multi-talented fox, Malaysia has to look internally at its own people and sharpen their strengths, which is essentially, a highly capable, globally competitive workforce that can work, learn and solve problems together.  

In other words, learn to see and plan like a fox whilst remaining true to one's nature of a hedgehog. The great rush towards economic growth and reaching high income nation status (US$12,500 or $15,000 GDP per capita) should not be the priority.

Besides, speeding up economic growth of up to 5% per annum will invariably worsen income inequalities, providing fodder for race-oriented politicians. 

Instead, the priority should be to repair communal ethnic relations and transform the political landscape and atmosphere (which has disintegrated in the past year into the current political impasse after a backdoor coalition called Perikatan Nasional replaced a democratically elected government in March 2020). 

More Than Elections

After imposing a national emergency to contain the pandemic, the current government with a wafer thin majority in Parliament is expected to hold a General Election later this year once the emergency is lifted (latest by 1st August).

But the seemingly gargantuan solution to Malaysia's 'structural' problems involves more than just voting in a competent government. 

The nation needs a large pool of leaders and common citizens on the ground who are ready to undo the shackle of race-based policies and create a new national vision of hope and rejuvenation. 

A blessing in disguise from the pandemic recession (which has hit many small and medium sized businesses across all ethnic communities) is that it is somehow stirring up an urgent need for political unity, bipartisan co-operation and reform. 

(There is no way an economy like Malaysia's can thrive without the mutual purchasing power of each community). 

But as I said earlier, it takes more than the election of a few good leaders to change the history of a nation. 

It takes an entire generation of common people to avoid those three psychological flaws mentioned earlier, namely; double-mindedness, giving excuses and intellectual indifference.

Like many developing nations struggling to recover from the pandemic recession, Malaysia's window for reform may still be open, notwithstanding the current geopolitical dynamic of the U.S.-China tensions in the region. 

Genuine change starts with facing up to its unique identity and acknowledging its destiny in the new global economic landscape.

The Tragedy of The Great Reset

The greatest tragedy of humanity in the 20th century was not like a Shakespearean tragedy where a select few people were killed out of human greed, hate and vanity.

No. Rather the tragedy of the 20th century was that mass killings of tens of millions were the result of  power-crazed men justifying their wars and genocide based on some intellectually cold Utopian ideologies of equality,  justice and racial superiority/purity.

The New Emperor's Clothes

And what about the 21st century? What trendy ideology has caught the minds of people and popularised by "respectable" scientists and celebrity billionaires?

The new ideology is the World Economic Forum's Great Reset comprising a hotchpotch of autocratic top down ideas such as climate change, 5G interconnectivity and regular vaccinations against mutated viruses the first of which is the Covid-19.

Not that there is no global warming. But the agenda of forcing consumers and nations to be carbon neutral within an impractically short period (2030) will only lead to the disruption of market forces, private incentives through high taxation and restrictions on human liberty.

We, as citizens of the Great Reset era, will be monitored, told what jobs we are to take, what assets to own and disown and what type of sustainable energy-efficient residential units to live in (Read their vague article on the WEF site posted as a test balloon).

Why would this lead to a great disaster? The ideology of the Great Reset is the figment of the elite's imagination. The bad news is that they have already started work on the project.

Clearly, they are aware of the backlash from their social experiment. Once free and sensible people see through their nefarious agenda of control, people will resist and reject the new feudal structure that governments seek to impose on them. Eventually, the civil unrest and anger will escalate into either internal civil revolutions or war among nations.

Already, nations today are internally divisive and divided between the rich vs poor, natural-born vs immigrants, whites vs blacks, left-wing vs right-wing, traditional conservatives vs liberal progressives and capitalist vs communist.

A Play in Three Acts

All it takes is one major global event to accelerate the momentum of the great reset. The Covid-19 pandemic, planned and plotted for years in biohazard labs around the world, is Act One of the agenda. 

The second Act is the rigging of the US elections. But the third Act of actually getting the masses to accept an unelected leader who cheated his way to power will hit a brick wall and unravel in the months ahead.

Once the evidence of fraud is made public, the majority of the common people who voted for Trump will revolt, first appealing to the Supreme Court (this February) but failing which, a military coup will be needed to restore the American Republic.

This is why, as I write in February 2021, that I think history will mark 2021 as the key year of a political and social awakening.

2020 will be remembered as a year of ignominy and geopolitical injustice (like a global Pearl Harbour event). But 2021 will be the year the curtain of darkness is lifted and the evil plotters are exposed.

Nations will tremble for being complicit (China, Iran, Italy, etc) in the direct cyber interference of the voting machines. 

But wars will not be declared yet by America against its enemies. It will initially be a disinformation war on the minds of global citizens.

For the 90% of the common people to resist the Great Reset, violent revolution or war ought to be the last resort. 

The most effective Sun Tzu strategy is to let the common people wake up to the corruption and evil schemes of their government leaders and see that they are unseated in times of economic and political unrest.

This is why the integrity of America's election (with a record 75 million people having voted for Trump) is the last man standing against the deep state's agenda for the Global Reset.