How safe are our bets? 🤔
Resources to better understand a potential energy crisis, an exploration of the very nature of risk and reward, and Jony Ive's memories of Steve Jobs, the man.
We need to talk about energy.
While the economies of the world play a dangerous game of cat and mouse with a potential financial crisis, a far more tangible one is creeping up on us. We’re running short of energy.
Reports state India’s coal reserves to be down to a few days, while China desperately struggles to reroute its limited energy to critical areas to keep things running. The Western world isn’t faring much better either — European natural gas futures are trading at sky high prices and the increasing heat requirements of the oncoming winter will only increase energy demands.
To get up to speed with how we got here, browse through this excellent storystream on the topic:
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Everyone’s talking about China 🎤
We covered China in some detail in the last issue of Forward — going over the potential impact of the Evergrande issue on global markets and the aggressive line the country’s government has been taking to curb unchecked wealth inequality.
For these reasons, China is finding itself as a primary topic of discussion in most discourse. Watch ARK Invest CEO Cathie Wood break down what’s going on in China, and shed some light on how the engines of the world economy are spluttering along.
Forward regular Balaji S also brought up China in a discussion with a high profile panel featuring the likes of Chamath Palihapitiya and David Sacks, delving into the larger social implications of the country’s current trajectory, and examining its harsh stance on crypto. Plenty of knowledge (and friendly banter) to be found here:
Bitcoin’s back y’all 🙌
After a tepid few months, Bitcoin is showing some strength again, giving cheer to investors across the world. That said, investors in the crypto space are still being kept on their toes by regulators and the pall of uncertainty they cast. Even as countries like El Salvador begin accepting crypto as legal tender, China has taken a much more strict stance by outlawing crypto transactions.
If you’re in the West, however, rest easy in the knowledge that the SEC has sent out a positive message that they have no intention of banning cryptocurrencies. In fact, the country is toying with the idea of asking institutions offering ‘stablecoins’ (digital currency pegged to other assets) to register themselves as banks.
Not that all this regulation and uncertainty is having any major impact on the growth of the crypto market, with Bitcoin, Ethereum, and Litecoin averaging over 1.5 million transactions a day. 👀
Banks on the brink? 🌊
The US economy is finally beginning to feel the heat of the incredible amounts of debt it’s been racking up, with Treasury Secretary Janet Yellen going so far as to say that unless corrective action is taken, a recession could well be on the cards.
Even as economic problems loom, banks around the world are also facing system outages, due to a combination of cyber attacks and failing legacy systems, forcing regulators like India’s Reserve Bank to step in and give local players a rap on the knuckles to make sure security and efficiency are improved.
Definitely not the best time to be a traditional bank.
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“Success has a nasty tendency to increase confidence more than ability. The longer it lasts, and the more it was tied to some degree of serendipity, the truer that becomes.”
— Morgan Housel
Stuff we loved this week 👍
It’s been 10 years since the world lost Steve Jobs, and his absence is felt most by the people who worked mostly closely with him. In this short but moving piece, Jony Ive — Apple’s former chief designer responsible for shaping many of the brand’s iconic products — remembers the enigmatic Jobs and offers a glimpse of what working with him was really like.
We humans have a tendency to go through life under the assumption that catastrophic occurrences with a very low probability of happening probably won’t happen to us. Despite history often proving otherwise, our inherent biases are likely to downplay real risks in favour of perceived reward, and take historic cycles for granted. As Morgan Housel points out:
A seductive belief throughout history is people expecting an idealized world where you demand perfection and assume that having little tolerance for error, variability, and disagreement is an asset.
Food for thought 💡
Crypto is many things to many people. But at Forward, we’ve always believed that the massive hype the crypto space generates is rooted deeper than the collective greed of those looking to make a quick buck. Which is why we’re inclined to agree with Brian Armstrong when he says crypto enables economic freedom.
When you break it down to its nuts and bolts, life is just a stream of decisions that provide outcomes based on how well the decision maker understood the risk and reward associated with each one. It’s a fascinating idea, and one worth diving deeper into here:
We’ll wrap up this issue of Forward with a couple of weekend content recommendations from the team here at NEO — an exciting read about the cyberwar between the West and China and what it could mean for the future of democracy, and a quick explainer on the fundamental nature of money itself.
📘 Book recommendation:
The Wires of War: Technology and the Global Struggle for Power
▶ Video recommendation:
Have fun! 👋
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Until next time,
Your friends at NEO