A tsunami of global changes in production relationships is about to arrive, as the trend of increasing entropy continues, the establishment of a new era gradually breaks through the critical point amidst chaos.
Original title: (Gary Yang: The Dramatic Change in the Landscape After Trump's Victory)
Written by: Gary Yang, founder of Starry Sky Capital
November 2024, written in Bangkok - Singapore - Hong Kong - Dubai
After Trump's victory, there was a violent reactive fluctuation in global social relations and financial assets, with the butterfly effect impacting many aspects. On the surface, Bitcoin and emerging assets surged, gold plummeted, the dollar regained some asset control, America established a new leadership team and even set up a D.O.G.E. department, global Degen and innovators regained confidence, and Devcon in the chaotic city of Cyberpunk reflected an indescribable celebration. Other civilizations' conflicts also seemed to benefit and took a temporary break; fundamentally, the global landscape is undergoing rapid upheaval, with development expectations mixed with completely different ideologies. A tsunami of global changes in production relationships is about to arrive, as the trend of increasing entropy continues, the establishment of a new era gradually breaks through the critical point amidst chaos.
In the days following Trump's victory, many friends asked a question: why did the US stock market and the Crypto Market rise simultaneously? Does Trump represent more centralization or decentralization? I made this reply online:
After Trump's and Musk's victories, the interests represented by the left side of the Nolan Curve were suppressed. In recent years, the extreme individual freedoms and blue shift have lost legitimacy, replaced by the right-wing forces of economic freedom. The feedback in recent days also proves that the red shift claims indeed bring hope to break the temporary predicament.
Many friends have asked why Bitcoin and the increasingly concentrated America do not represent opposing views of center and decentralization, and yet both assets have risen simultaneously in recent days. The reason is clear: this is a breakthrough into temporary economic freedom before the war after breaking the constraints of left-wing dogmatism.
This involves several aspects of issues, which also give rise to more essential questions:
The contradiction of the qualitative change in the alternating pattern of the two major parties in the United States.
The faith replacement of the three generations of financial system anchors
The historical significance and accompanying issues of Bitcoin and Crypto
Do Trump and Musk represent the stance and interests of the Crypto financial system?
The rise of the younger generation and the inevitability, problems, and twists of establishing new production relations systems
The wisdom of social groups is aiding the establishment of new production relationship systems through a very special decentralized method.
The main and secondary contradictions of the current global world and the chaotic cycles brought by uncertainty
I. The contradictory essence of the qualitative change in the alternating positions of the two parties in the United States.
The positions of the two American parties represent different freedoms on both sides of the Nolan Curve. The left-wing and blue of the Democratic Party represent individual freedom and conditional, reciprocal freedom claims; the right-wing and red of the Republican Party represent economic freedom and unconditional competitive freedom claims, closely aligned with Social Darwinism. Since Social Darwinism has extreme points that can be easily attacked in the management of Eastern and Western civilizations during peacetime, it is not advocated by many countries, including the United States. In contrast, the individual freedoms advocated by the Democratic Party meet both the needs of individual survival and the needs of stable development by managers during a peaceful historical phase, thus becoming a relatively dominant culture in the past 20 years in the United States.
However, in the evolution and development process in recent years, as the previous cycle's industry—mainly the computer and internet industry—gradually matured, the liberal environment gradually transitioned to pragmatic utilitarianism, and then continued to evolve into collective authoritarianism (Note 1), manifested as corporate monopolies, fierce competition, soaring prices, industry in-fighting, and complex and costly entry barrier systems globally. The individual freedom system has gradually stiffened under the demands of finance and politics, developing towards extreme individual freedom, with many people believing that the over-acceptance of hundreds of gender identifications, the excessive proliferation of marijuana, and the increasingly intense capital competition and inflation are extreme products of right-wing overdevelopment. Left-wing innovative entrepreneurs represented by Musk, after being excluded from the Democratic Party's whitelist for opposing the establishment of unions, and as a result of NASA turning to support SpaceX as a competitor, along with his eldest son's sex reassignment surgery becoming the last straw, ultimately led to the complete explosion of the value confrontation represented by the two parties. The contradictory essence of the qualitative change in the alternating positions of the two parties in the United States actually represents the contradiction between the rigid and excessive left-wing individual liberal management methods represented by the Democratic Party, which align with the interests of the FED during the previous historical phase, and the radical breakthrough new capital establishment management methods represented by the new Republican aristocracy. The election results in November 2024 indicate that the latter's voice ultimately gained dominant momentum, breaking through the conservative left's power, and temporarily allowing history to evolve towards a rightward blue shift.
This evolution typically only has breakthrough dividends in a short period, and when such nodes appear historically, they usually do not transition peacefully to the next stage of major development. Generally, there are two outcomes: one is a strong counterattack from the opposing side, resulting in a more chaotic situation, and the other is that the breakthrough forces, in order to consolidate this change and new trend, must form a more centralized power or implement more extreme strategies, leading to an opposite extreme. Whether the combination of Trump and Musk is more akin to Caesar and Octavian moving towards the latter, or whether they become a genuine representation of the digital information age's Lincoln according to the needs of the times, is still difficult to conclude as of 2024, or it may be itself a superposition state.
II. The faith replacement of the three generations of financial system anchors
In the days following Trump's victory, the anchoring targets of the three generations of financial systems: gold, the dollar, and Bitcoin underwent rapid and drastic changes; it can be said that the rapid response speed of market wisdom (Market Swarm AI) still exceeds our individual imaginations.
This point is very simple and clear. Gold represents the historical financial credit system of the gold standard, the dollar represents the credit system of dollar-based financial institutions rooted in U.S. credit since the Bretton Woods rules, and Bitcoin represents a decentralized new digital financial credit system constructed outside existing centralized financial institutions, driven by non-centralized collective interests, which is still incomplete but represents the future digital information society. These three systems formed a temporary equilibrium prior to Trump's victory by continuously reinforcing gold, followed by the dollar, while Bitcoin was weakening. From the data, from 2023 to November 2024, gold soared from less than 2000 to 2800, while the global asset influence of the dollar declined by 3%, and Bitcoin continued to lack momentum after the halving, with the passing of ETFs leading to a concentration in the Crypto industry, reduced innovation, and a decline in total market cap.
Just a week after Trump's victory, the values and control of the above three anchoring assets rapidly underwent significant reversals; this can be reflected not only from their own prices but also from the increases and decreases in their correlations with one another and with other cross-asset classes (Note 2). The three anchoring assets represent the positions of the 'old, middle, and young' three generations of financial systems, symbolizing different consensuses from different historical periods. Gold's time spans from 600 BC to 1944 AD, the dollar's from 1944 AD to now, while the continuous breakthroughs of Bitcoin following this election indicate that the decentralized new financial value system being explored in the mid-digital information age is further growing. By mid-November 2024, the total market cap of Crypto was close to 3.2 trillion, with Bitcoin itself nearing 1.9 trillion, which is less than double the distance from Nvidia's 3.5 trillion.
III. The historical significance and accompanying issues of Bitcoin and Crypto
The consensus on the historical significance of Bitcoin and Crypto representing the decentralized management system of smart contract establishment for future society is continuously rising, especially after Trump's victory, with a trend of quantitative change leading to qualitative change.
In a speech in Nashville in July 2024, Trump mentioned related actions he would take if elected:
Dismiss Gary Gensler and appoint a new SEC chairman;
Establish a strategic national Bitcoin reserve for the U.S. government.
The U.S. government will retain its 100% ownership of Bitcoin.
During the term, ensure that the U.S. will not have a CBDC.
End the Biden and Harris administration's anti-cryptocurrency movement and enhance the innovative environment for cryptocurrencies.
Let Bitcoin and cryptocurrencies soar in unprecedented ways.
Support the freedom and sovereign independence represented by Bitcoin, ensuring it is not subject to coercion and control by the U.S. government.
From the short-term actual situation after Trump's victory in November 2024, besides the continuous surge in Bitcoin and Crypto prices, there are indeed signs of implementation for other points in the checklist. This acceleration process will undoubtedly bring about significant changes in interest structures, credit foundations, market transactions, and the essence of social production relationships, so it can be said that Trump and Musk are continuously pushing history to bring about node-like changes in the United States and even the world.
While the theory of the approaching singularity makes the logic of exponential curve development easy to understand, the rapid node changes, especially regarding important interests and production relationship management changes, will inevitably encounter various levels of contradictions and backlash. The temporarily stable status of the eye of the storm by the end of 2024 will be short-lived; many power subjects and interest agencies are more about being caught off guard in adjustment and facing greater uncertainty and chaotic anxiety during this phase. Although the future financial and social systems depicted by Bitcoin and Crypto have distinct and strong orthodoxy in future positions, the accompanying problems and contradictions are too numerous to be instantly digested at this historical stage. As Su Shi from the Northern Song Dynasty in China said in his later years to Wang Anshi, the reforms jointly advocated by Wang Anshi and Emperor Huizong of Song (Note 3) were not because others did not understand them as more advanced, but because they impacted too many interest structures that could not gain support. It is clear that the joint actions of Trump and Musk are much more radical than those of Emperor Huizong of Song and Wang Anshi, and the accompanying problems and consequences awaiting them will also be more intense, with the world facing greater uncertainty and chaos.
The accompanying issues with the strong rise of Bitcoin and Crypto after Trump's victory are numerous, and here are just a few aspects listed simply:
It will fundamentally affect and change the definitions and operational methods of payment settlements, transaction scenarios, asset management, credit supervision, and even the economic and value systems of the U.S. and the world.
There is an essential conflict with the current and planned economic and fiscal policies of countries around the world, and the strategies used to manage social production as a result;
The differences in decision-making and solutions that countries face, derived from the above two points, further lead to an escalation of the clash of civilizations (Note 4) and a polarization of global claims contrasting democracy and collective ideals.
IV. Do Trump and Musk represent the stance and interests of the Crypto financial system?
The current positions of Trump and Musk are complex superposition states, and their essential positions cannot be directly judged from the surface.
Regarding Trump and Musk themselves, although both have characteristics of self-realization under the economic freedom claims of the right-wing stance, Trump is relatively more realistic and has the characteristic of leveraging tools and trends during the development process.
So in the face of the stance and interests of the future world financial and Crypto, Trump is more of a bottom-up approach, that is, the logic of 'if this can accomplish me, then choose it,' which has been very clear in his past speeches:
"I'm too old to worry about who likes me and who dislikes me. I have more important things to do. If you love me, I love you. If you support me, I support you. If you hate me, I don’t care. Life goes on with or without you."
In other words, from the future perspective at this stage, it cannot be said that Trump has always represented the stance and interests of the Crypto financial system, but only that Trump leveraged this trend to achieve his stage goals, thereby also promoting the rapid development of this trend.
Musk's situation is slightly different; relative to Trump, he is more idealistic, that is, the logic of 'the future of this world should be like this, I stand with the future,' with more top-down thinking, but of course, he is still a realist. This is also why he chose to commemorate Nikola Tesla as the company name and transcend Tesla, realizing the essence of combining ideals and reality.
Based on this foundation, Musk has a more idealized future vision in his mind. Starting from the point that future production relationships will be more efficient, the governance of Crypto's Smart Contracts, decentralized financial issuance, and decentralized collective decision-making all have clear orthodoxy, which is also why after Trump's victory, the D.O.G.E. department was immediately launched and Musk was appointed as the head, as well as Musk's proposition to abolish the IRS's automated reporting stance. Therefore, compared to Trump, Musk's self-realization, due to the additional idealism he carries, allows him to represent the stance and interests of the Crypto financial system more.
Of course, this representation and promotion are also based on the realistic interests he has planned; like any other agency and individual, Musk also finds it difficult to work and develop under a de-ego position, at least not at this stage. In the superposition state of Octavian and Lincoln, if Musk can successfully escape the current counter-pressure and enter the next stage, and thereafter can transcend history by abandoning personal worship to continue promoting the development of decentralized new finance and social systems, then he can become a historical node, which can also be said to represent the stance and interests of the new system. It is difficult, but it is not impossible.
V. The rise of the younger generation and the inevitability, problems, and twists of establishing new production relationship systems
Regardless of whether Musk ultimately completes the historical node task in a good posture, he has successfully represented the transitional transformation connecting the two generations before and after the singularity. The increasing number of young people's Degen thinking is rising along this transitional transformation.
After Trump's victory, based on the points discussed above: the qualitative change in the alternating positions of the two parties in the United States, the faith replacement of the three generations of financial system anchors, the further growth of Bitcoin and Crypto representing the decentralized management system of future society's smart contract establishment, as well as the reflection on the psychology and issues of different positions using Trump and Musk as examples; it can be seen from these that the trend of the new system's establishment process is obvious, and the problems and contradictions are also very distinct.
The D.O.G.E. department appeared with a very comical perspective; although unbelievable, it accurately pointed out one of the biggest issues in the current world: the unresolvable low production efficiency under the existing global mainstream economic and social environment. The essence behind this is the irreconcilable issues of global economic and trade exchanges, leading to unresolvable contradictions between various social civilizations, with the irreversible entropy increase in production, employment, and financial governance in various countries. The peace environment brought by Keynesian thought is about to come to an end.
Interestingly, when such essential contradictions arise, almost all countries and subjects choose to revert to traditional management methods, advocating a traditional management approach characterized by their own civilization rather than risking to accept a new, more efficient management method. This was predicted and reasonably explained in Huntington's Clash of Civilizations and is easy to understand, as taking a relatively more familiar path carries lower risks and helps managers maintain stability. This reason will cause significant resistance to the establishment of new systems, resulting in twists in the development of the era.
In the current world environment, such traditional management methods are more likely to occur in the major civilization blocks of the Northern Hemisphere. Conversely, some sub-civilizations and regions in the Southern Hemisphere, where the original civilization intensity is not very centralized (Note 5), are about to become the soil for the establishment of new civilizations and emerging production relationship systems.
VI. The wisdom of social groups is aiding the establishment of new production relationship systems through a very special decentralized method.
The first large-scale Crypto industry event after the election, Devcon, was held in Bangkok, Thailand. Known as the most charming city in a Cyberpunk style, it was congested from morning till night; the neon lights and chaos under the congestion formed a breeding ground for the rapid interaction and cooperation of decentralized civilization, jokingly referred to as the city of sin. Degen and Digital Nomads are building the Infra of DeFi here, discussing techniques for rapid launches and gold mining memes, with the emotions of FOMO rapidly integrating into the thoughts of Blockchain and Protocol under an unregulated environment, forming a decentralized social and economic management system that breaks the Keynesian thought through the establishment of new smart contracts, as if millions are writing a new Code of Hammurabi together. To a certain extent, Bangkok, Thailand, compared to the new Singapore under Token2049 and the dazzling Dubai, possesses more of the native characteristics of the emerging production relations system.
When I mention the characteristics of this era for paradigm comparisons, I often use the Renaissance at the end of the Middle Ages, and Cyberpunk Bangkok is like the Baroque period of the Renaissance. The iterative evolution of Degen social group consciousness, in such a diversified and open environment, forms rapid neuronal collisions, creating collective wisdom (Swarm AI).
The openness of the soil has an astonishing evolutionary effect on this collective wisdom. Perhaps even the Solana Foundation did not imagine that within two weeks after Trump's victory, the meme explosion driven by pump.fun could reach this level. The seemingly disorderly and speculative meme launch is silently extracting liquidity from CeFi and TradFi, changing the logic of CEX and VC projects, resisting and reconstructing a more DeFi Native new order. The PVP of all practitioners is, in fact, the basic unit of the new system's microfinance, the basic cell of the next-generation economy, and the cellular automaton of the new financial establishment. Moreover, with the concepts of AI Agent and AI Validator continuously evolving and maturing, along with CZ's recently advocated DeSci thinking as a catalyst, providing direction to the disorder of memes, it is believed that the evolutionary development in the coming years will be immeasurable.
The grassroots iteration of the establishment of the emerging production relations system has never slowed down; Trump's victory was like a flame igniting this long-accumulated catalytic reaction.
VII. The main and secondary contradictions of the current global world and the chaotic cycles brought by uncertainty.
The global situation in November 2024 is at a significant historical node, with uncertainty, deeper chaos, and the establishment of new systems all at a critical point of imminent occurrence. The tension and opposition brought about by Trump's victory will become the final blow to dismantle the original world consensus.
What is the main contradiction in the current global world? Samuel Huntington pointed out in 1994 that it is the conflict of civilizations between different civilizations, a foundational recognition that I respect and agree with. However, having experienced the stark contrast of global civilizations and developments in 2024, seeing the dramatic victories of Trump and Musk, and imagining the indescribable uncertainties and chaotic expectations that follow, it becomes clear that contradictions are not limited to this.
The main contradiction in the current global world is:
From a top-down perspective globally, countries and interest subjects starting from their original collective interests, in the context of the post-World War II environment based on Keynesian Western economics for coexistence and peace, use power to manage productivity and means of production to maintain and amplify their own advantages in order to confront and compete with other subjects.
Same
From a bottom-up perspective globally, individuals and interest subjects starting from their own newly emerged individual interests, when faced with a new generation of global decentralized blockchain-based smart contract new financial environment, aim to break through and surpass existing advantages to obtain new soil for reconstruction and growth, and seek alternative proposals for the establishment of productive forces and means of production.
The contradictions between them. In fact, by the end of 2024, under the global situation, most countries and interest subjects are still in a semi-feudal and semi-decentralized national capitalist environment, and the current main contradiction is transitioning them towards a semi-decentralized national capitalism and semi-decentralized digital information management.
Under such a main contradiction, the conflicts of civilizations and the contradictions between AI digital and humanity temporarily belong to secondary contradictions at this stage. Before Trump's victory, the potential Thucydides Trap and the potential new Cold War represented the characteristics of main contradictions regarding civilization conflicts; however, after Trump's victory, it is clear that these will gradually retreat to secondary contradictions, and even some of the conflicts of civilizations in the Middle East will also become secondary contradictions for a certain time. Replacing them will be this new main contradiction. Of course, within this century, the contradictions between AI digital and humanity are likely to heat up, exceed, and become updated main contradictions, but not at the current moment.
For such a completely different new civilization conflict between top-down and bottom-up approaches, the cycle of uncertainty and chaos has just begun. Many people think that the uncertainty and chaos brought by the pandemic from 2020 to 2023 have ended, but in fact, this is just the prologue to a larger epoch. The plagues, wars, famines, and deaths under the new paradigm of the era have their own pace, and what we need to do is not to evade or deny, but to clarify, face, follow the trend, and change.
Note:
Note 1: The article published in February 2020 titled 'The Gears of Society' describes the cyclical process of global historical development divided into four stages: idealism, liberalism, pragmatism, and collectivism.
Note 2: The correlation between the dollar and gold before and after Trump's victory in November 2024 changed dramatically from +0.85 to -0.89, setting a historical record.
Note 3: Wang Anshi's reform was a joint reform movement in China during the Northern Song Dynasty that began in 1069 and ultimately ended in failure.
Note 4: The Clash of Civilizations and the Remaking of World Order is a work by American political scientist Samuel Huntington, first published in 1996.
Note 5: Refers to regions where diversified civilization integration is relatively balanced, and the main civilization is not very strong, such as Southeast Asia, Central and South America, Australia and Oceania, parts of Africa, and the Middle East.
